A Price-Taking Firm in the Short Run Should Not Produce

question 43

Multiple Choice

A price-taking firm in the short run should not produce any level of output unless

• A)marginal revenue exceeds marginal cost.
• B)marginal revenue equals average total cost.
• C)average revenue equals or exceeds average variable cost.
• D)average revenue equals or exceeds average total cost.
• E)it is earning positive profits.

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Definitions:

Public Debt

The total amount of money that a government owes to creditors, often as a result of deficit spending.

Federal Government Deficits

Occurs when a government's expenditures exceed its revenues during a specific fiscal period, leading to borrowing or debt accumulation.

Fiscal Policy

Government modifications of its expenditure levels and tax policies to observe and manage a country's economic condition.

National Income

The total amount of money earned within a country, including wages, rent, interest, and profit, reflecting the overall economic activity.