A fiRm Should Shut Down in the Short Run If

question 4

Multiple Choice

A firm should shut down in the short run if the market price of its product doesn't cover its _____ of production.

• A) total fixed cost
• B) average total cost
• C) average variable cost
• D) average fixed cost

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Definitions:

Production Decisions

The determination of what, how, and for whom goods and services will be produced by a firm.

Output

The total amount of goods or services produced by a company, sector, or economy.

Normative Questions

Questions that address what should be, focusing on value judgments and opinions rather than empirical facts.

Value Judgments

Assessments or opinions based on individual beliefs about what is important or desirable, often influencing decisions and policies.