Table 14-2 The Table Represents a Demand Curve Faced by a Firm

question 388

Multiple Choice

Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
-Refer to Table 14-2. For this firm, the average revenue from selling 3 units is

• A)$12.
• B)$4.
• C)$3.
• D)$1.

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Definitions:

Shutdown Point

The level of operations at which a company or business does not generate enough revenue to cover its variable costs, leading to a temporary or permanent closure.

AVC (Average Variable Cost)

The total variable costs (costs that vary with the level of output) divided by the quantity of output produced, representing the variable cost per unit.

MC (Marginal Cost)

The rise in overall expenses associated with the production of an extra unit of a product or service.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no profit or loss.