In the Short Run, a Purely Competitive Seller Will Shut

question 70

Multiple Choice

In the short run, a purely competitive seller will shut down if

• A) it cannot produce at an economic profit.
• B) price is less than average variable cost at all outputs.
• C) price is less than average fixed cost at all outputs.
• D) there is no point at which marginal revenue and marginal cost are equal.

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Definitions:

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation.

Marginal Tax Rate

The tax rate that applies to each additional dollar of income, indicating how much of the next dollar earned will be taken in taxes.

Average Tax Rate

Average Tax Rate is the proportion of the total income paid as taxes, calculated by dividing the total taxes by the total taxable income.

Total Taxes

The combined amount of all the taxes imposed by a government on an individual or business, including income tax, property tax, sales tax, etc.