A Firm Will Shut Down Temporarily When the Price Is

question 91

Multiple Choice

A firm will shut down temporarily when the price is so low that total revenue is insufficient to cover the

• A)total cost of production.
• B)total variable cost of production.
• C)total fixed cost of production.
• D)marginal cost of production.
• E)average variable cost of production.

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Definitions:

Mining Company

A company involved in the extraction of minerals, metals, or other geological materials from the earth.

Mineral Rights

Legal entitlements allowing the holder to explore, extract, and sell mineral resources from a piece of land.

Depletion

The allocation of the cost of natural resources over their productive life.

Granite

A very hard, granular, crystalline, igneous rock consisting mainly of quartz, mica, and feldspar; widely used as a building stone.