Consider the Following Data: Equilibrium Price = $10,quantity of Output

question 4

Multiple Choice

Consider the following data: equilibrium price = $10,quantity of output produced = 100 units,average total cost = $13,and average variable cost = $7.What will the firm do and why?

• A) Shut down in the short run, because it is taking a loss of $200.
• B) Continue to produce in the short run, because price is greater than average variable cost.
• C) Shut down in the short run, because average variable cost is less than average total cost.
• D) Continue to produce in the short run, because firms are always stuck with having to produce in the short run.

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Definitions:

Control Mechanisms

Tools or systems used to manage, command, or regulate the behavior of individuals or the operation of a system.

Interim Deadlines

Set checkpoints or due dates before the final deadline to ensure progress on a project or task.

Emotional Intelligence

The ability to recognize, understand, and manage one's own emotions and the emotions of others effectively.

Leadership Tendencies

Inclinations or propensities towards taking charge, guiding, or directing groups or organizations.