In Order for a Price Taker to Continue to Operate

question 94

Multiple Choice

In order for a price taker to continue to operate and produce output,it must be the case that

• A) it earns a profit.
• B) total revenue is greater than or equal to the total cost of both the fixed and the variable factors of production.
• C) total revenue is greater than or equal to the cost of the fixed factors of production.
• D) total revenue is greater than or equal to the cost of the variable factors of production.
• E) it avoids a loss.

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Definitions:

Marginal Cost

The increase in cost that arises from producing an additional unit of a good or service.

Marginal

Incremental, additional, or extra; used to describe a change in an economic variable.

Incremental

Describes small, gradual changes or increases made over a period of time.

Economic Information

Data related to the production, distribution, and consumption of goods and services that informs decision-making.