For a Particular Competitive Firm, the Minimum Value of Average

question 222

Multiple Choice

For a particular competitive firm, the minimum value of average variable cost (AVC) is $12 and is reached when 200 units of output are produced. For the same firm, the minimum value of average total cost (ATC) is $15 and is reached when 230 units of output are produced. Which of the following statements is correct?

• A)In the short run, the firm will shut down if the price of its product is $14.
• B)In the long run, the firm will shut down if the price of its product is $11.
• C)For this firm, the minimum value of variable cost (VC) is $2,400.
• D)If the firm's fixed cost (FC) amounts to $500, then the firm cannot earn a positive profit unless the price of its product exceeds $16.

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Definitions:

Adaptive Traits

Features of an organism that have evolved through natural selection and increase survival and reproductive success in a particular environment.

Artiodactyls

A group of hoofed mammals that typically have an even number of toes, including cattle, pigs, and deer.

Astragalus

A genus of plants in the legume family, some species of which are used in traditional medicine.

Morphology

Refers to the form and structure of organisms.