Suppose a Paper Mill in Quebec Is Shut Down by Its

question 23

Multiple Choice

Suppose a paper mill in Quebec is shut down by its owner, even though the plant and equipment are in excellent shape and the paper is of top quality. What could explain this?

• A) The price the firm is receiving for the paper is less than its average variable cost.
• B) The owner is minimizing its production costs.
• C) The price the firm is receiving is less than the average total cost.
• D) The price the firm is receiving for the paper is greater than its marginal cost.
• E) The paper mill must not have been operating at its profit- maximizing level of output.

---

Definitions:

Algebraic Expression

A mathematical phrase that can contain ordinary numbers, variables, and operators.

Verbal Phrase

A verbal phrase is a group of words expressing an action or a state of being, often used in mathematics to translate words into algebraic expressions or equations.

Divided

A mathematical operation where one quantity is evenly distributed into parts or groups.

Algebraic Expression

A combination of variables, numbers, and at least one arithmetic operation, without an equality sign.