A Firm Will Choose to Operate Rather Than Shut Down

question 105

Multiple Choice

A firm will choose to operate rather than shut down as long as

• A) price is greater than or equal to AFC.
• B) AFC is greater than AVC.
• C) price is greater than or equal to AVC.
• D) AVC is greater than MC.

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Definitions:

Growth And Decline

Phases in the lifecycle of a business, product, or industry where they experience expansion and contraction in size, revenue, or market share.

Retail Outlets

Physical stores or points of sale where consumers can purchase goods or services.

Retail Life Cycle

The retail life cycle refers to the process of growth and decline that retail outlets experience, similar to the life cycle of a product, including the stages of introduction, growth, maturity, and decline.

Market Share

The share of a market held by a certain company or product, usually represented as a proportion of the total market sales.