If Price Falls Below the Minimum Point on the AVC

question 90

Multiple Choice

If price falls below the minimum point on the AVC curve, in the short run the firm should ________, and in the long run the firm should ________.

• A) produce where MC = MR; exit the industry
• B) shut down; exit the industry
• C) produce where MC = MR; expand
• D) shut down; expand

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Definitions:

Information Processing

A cognitive approach that emphasizes the way people encode, store, process, and retrieve information.

Conscious Processing

The mental activities and cognitive processes that occur within awareness, allowing for intentional thought and decision-making.

Problem Simultaneously

The process of dealing with or managing two or more issues at the same time.

Delta Waves

Low frequency brain waves that indicate deep sleep or meditation.