In the Long Run, When Price Is Less Than Average

question 26

True/False

In the long run, when price is less than average total cost for all possible levels of production, a firm in a competitive market will choose to exit (or not enter) the market.

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Definitions:

Contractual Clause

A provision included in a contract that specifies a particular requirement, obligation, or condition affecting the agreement's parties.

Specific Performance

A court order to perform the exact terms of a contract, rather than paying damages for failing to meet the terms.

Commercial Impracticability

A legal doctrine that excuses a party from performing its contractual obligations due to unforeseen events that make performance exceedingly difficult or expensive.

Earthquake

A natural phenomenon characterized by the shaking of the earth's surface, typically resulting from the movement of tectonic plates beneath the earth's crust.