Suppose a Paper Mill in Quebec Is Shut Down by Its

question 36

Multiple Choice

Suppose a paper mill in Quebec is shut down by its owner,even though the plant and equipment are in excellent shape and the paper is of top quality.What could explain this?

• A)The paper mill must not have been operating at its profit- maximizing level of output.
• B)The price the firm is receiving for the paper is greater than its marginal cost.
• C)The price the firm is receiving for the paper is less than its average variable cost.
• D)The owner was not minimizing its production costs.
• E)The price the firm is receiving is less than the average total cost.

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