In the Standard Model of Pure Competition, a Profit-Maximizing Firm

question 27

Multiple Choice

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if

• A) marginal cost is greater than average revenue.
• B) average cost is greater than average revenue.
• C) average fixed cost is greater than average revenue.
• D) total revenue is less than total variable cost.

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Definitions:

Promissory Estoppel

Promissory estoppel is a legal doctrine that enforces a promise made when the promisee has relied on that promise to their detriment, even if a formal contract does not exist.

Good-Faith Reliance

Acting based on the honest belief or trust in the legitimacy or accuracy of something.

Statute of Frauds

A legal concept requiring certain types of contracts to be in writing and signed by the party being charged, to prevent fraud and perjuries in the court system.

Statute of Limitations

Law that sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim.