In Order for a Firm to Continue Producing, Price Must

question 58

Multiple Choice

In order for a firm to continue producing, price must exceed __________ and total revenue must exceed __________.

• A)marginal cost; total cost
• B)ATC; total cost
• C)AFC; total fixed cost
• D)AVC; total variable costs
• E)price; total cost

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Definitions:

Increasing Cost Industry

An industry in which production costs increase as output expands, typically due to factors such as input limitations and increased demand for inputs.

Long-Run Supply Curve

A curve showing the relationship between price and quantity supplied that takes into account all possible adjustments in inputs and outputs.

Constant-cost Industry

An industry where the costs of production do not change as the total output in the industry changes.

Long-run Supply

Long-run Supply refers to the quantity of a good that producers are willing and able to supply onto the market at different price levels when all production inputs can be varied.