If TR < TC, a Firm Would ________ in the Short

question 296

Multiple Choice

If TR < TC, a firm would ________ in the short run and ________ in the long run.

• A) either operate or shut down; contract
• B) operate; contract
• C) shut down; expand
• D) shut down; contract

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Definitions:

Production Declines

A reduction in the quantity of goods and services produced, often due to factors such as decreased demand or disruptions in supply chains.

Cartel Members

Entities that agree to work together to control prices and market shares within an industry, inhibiting competition.

Market Demand Curve

A graph showing the relationship between the price of a good and the total quantity demanded by all consumers in the market at each price level.

Elastic Demand

A situation in which the demand for a product is sensitive to price changes, meaning the quantity demanded significantly increases or decreases as the price decreases or increases.