If Price Is Greater Than Average Variable Cost and Less

question 180

Multiple Choice

If price is greater than average variable cost and less than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

• A) produce at an economic loss.
• B) produce at an economic profit.
• C) shut down production.
• D) produce more than the profit-maximizing quantity.

Recognize the role of political opportunities, resource mobilization, and social control in shaping collective action.

Analyze the impact of social and political environments on the probability and nature of protests and collective violence.

Understand the role of lynching in enforcing discipline among black farm workers post-slavery.

Recognize indicators of social breakdown and strain.

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Definitions:

Economic Profits

The discrepancy between what a business earns in total revenue versus the sum of its explicit and implicit expenditures.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, leading to competition.

Profit-Maximizing

A strategy where a firm sets its production level to achieve the highest possible profit, where marginal cost equals marginal revenue.

Profit-Maximizing Monopolistically Competitive

A situation where a firm in a monopolistically competitive market sets its product prices and output levels to maximize its profits, recognizing it has some degree of market power.