If Market Price Is Greater Than or Equal to the Minimum

question 31

Multiple Choice

If market price is greater than or equal to the minimum of AVC but below the minimum of AC, then

• A)the firm will shut down.
• B)the firm will operate because its loss is less than if it shuts down.
• C)revenue is lower than variable costs.
• D)profit is positive and so the firm will operate.

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Definitions:

Warranty Rights

Legal rights guaranteed to consumers, ensuring that products meet certain standards of quality and reliability.

Third Parties

Individuals or entities that are not directly involved in a legal agreement or transaction but may be affected by it or have an interest in its outcome.

Seller's Warranties

Guarantees made by a seller regarding the condition, quality, or title of the goods being sold.

Puffing

An exaggerated or hyperbolic statement made by a seller about the quality of goods, often considered a subjective opinion rather than a factual claim.