Suppose That a Competitive Firm Finds That in Its Short-Run

question 138

True/False

Suppose that a competitive firm finds that in its short-run equilibrium situation, its marginal cost is higher than its average total cost. If things are not expected to change and there are constant returns to scale, then the firm will exit the industry in the long run.

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Definitions:

Job Specialization

involves the process of focusing an employee's responsibilities on a specific set of tasks, allowing for increased efficiency and expertise in those tasks.

Coordinating Mechanisms

Tools, processes, or structures used to align tasks, activities, and communication within an organization to ensure effective functioning.

Standardization

The process of establishing and applying uniform criteria, methods, processes, or practices across different areas or industries.

Organic Structure

A flexible management approach characterized by decentralized authority, fewer formal procedures, and open communication channels.