When Firms in an Industry Are All Producing at the Minimum

question 38

Multiple Choice

When firms in an industry are all producing at the minimum of average total costs,

• A)consumers pay the highest possible price.
• B)firms begin to leave the industry.
• C)per unit costs are at their lowest.
• D)there is no consumer surplus.
• E)price is greater than marginal cost.

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Definitions:

Interest Costs

The expense incurred by an entity for borrowed funds, usually expressed as an annual percentage rate.

Long-term Debt

Financial obligations of a company or individual that are due after a period of one year or more.

Trade Credit

Debt arising from credit sales and recorded as an account receivable by the seller and as an account payable by the buyer.

Discounts

A reduction from the usual cost of something, often applied to prompt payment or to certain categories of customers.