When a Profit-Maximizing Firm's Fixed Costs Are Considered Sunk in the Short

question 379

Multiple Choice

When a profit-maximizing firm's fixed costs are considered sunk in the short run, then the firm

• A)can set price above marginal cost.
• B)must set price below average total cost.
• C)will never show losses.
• D)can safely ignore fixed costs when deciding how much output to produce.

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Definitions:

Independence of Irrelevant Alternatives

A decision-making principle asserting that the relative preference between two options should not be affected by the introduction of a third irrelevant option.

Borda Count Election

A voting method that involves ranking candidates in order of preference, with points assigned based on position in the ranking, to determine the winner.

First Choice

The primary option or preference selected from a range of alternatives.

Pairwise Votes

A method of voting where each candidate is matched against every other candidate in one-on-one comparisons.