If Your Firm Is Producing a Good at a Level

question 7

Multiple Choice

If your firm is producing a good at a level where marginal revenue equals marginal cost, and price is greater than average total cost, your firm

• A) should shut down and suffer a loss equal to your fixed costs.
• B) is earning an economic profit greater than zero.
• C) should decrease output.
• D) should increase output.

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Definitions:

Defense

Measures, strategies, or mechanisms employed to protect against attack, harm, or damage in military, sports, or legal contexts.

Laboratory coat

A protective garment worn to prevent contamination of clothing and skin from hazardous substances in a lab setting.

Eye goggles

Protective eyewear that encloses the area surrounding the eye in order to prevent particulates, water, or chemicals from striking the eyes.

Antiseptic

A cleaning product used on human tissue as an anti-infection agent.