When Total Revenue Is Less Than Variable Costs, a Firm

question 49

Multiple Choice

When total revenue is less than variable costs, a firm in a competitive market will

• A)continue to operate as long as average revenue exceeds marginal cost.
• B)continue to operate as long as average revenue exceeds average fixed cost.
• C)shut down.
• D)raise its price.

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Definitions:

Depression

A psychiatric disorder characterized by a lasting feeling of depression or a disinterest in engaging in activities, significantly altering day-to-day life.

Seasonal Affective Disorder

A type of depression that occurs at a specific time of year, usually in the winter, when there is less natural sunlight.

Equator

An imaginary line that wraps around the center of the Earth, equidistant from the North and South Poles, dividing the Earth into Northern and Southern Hemispheres.

Daylight

The natural light received from the sun during the day.