A Price- Taking Firm in the Short Run Should Not

question 43

Multiple Choice

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

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

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Definitions:

Voluntary

An action undertaken by one's own free will without external coercion or undue influence.

Liquidation

The process of converting a company's assets into cash to pay off creditors before dissolving the company.

Involuntary

Occurring without a person's consent or control, often referring to actions or processes not chosen or intended.

Bankruptcy Estate

The assets that are collected from a debtor who files for bankruptcy.