If Price Is Less Than Average Cost

question 81

Multiple Choice

If price is less than average cost,:

• A) the firm may still make profits as long as marginal cost is low.
• B) the firm's maximum profit is a loss.
• C) there is no profit-maximizing rate of output.
• D) marginal cost must be high.

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Definitions:

Steer Axle

The front axle of a vehicle, which is connected to the steering mechanism, allowing the driver to control the vehicle's direction.

Tie Rod

A crucial component in the steering system of a vehicle that transmits force from the steering center link to the steering knuckle, enabling steering.

Power Divider

A component in the differential of a heavy-duty vehicle that distributes power evenly to the axles, enhancing traction.

Locked Out

A situation where access is denied or unavailable, typically referring to a security or safety mechanism.