If the Price Is Greater Than the Average Variable Cost

question 46

Multiple Choice

If the price is greater than the average variable cost and less than the average total cost at the profit-maximizing quantity of output in the short run,a perfectly competitive firm will:

• A)produce at an economic loss.
• B)produce at an economic profit.
• C)shut down production.
• D)produce more than the profit-maximizing quantity.

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Definitions:

Deindustrialization

The process of social and economic change caused by the removal or reduction of industrial activity, especially in manufacturing sectors, in a region or country.

Blue-Collar Workers

Refers to employees who perform manual labor or skilled trades, often requiring physical work and sometimes specialized training.

Automobile Industry

Refers to the global industry involved in the design, development, manufacturing, marketing, and selling of motor vehicles.

Monetary Theory

A body of economic theories that examines the role of money in affecting the economy, including the supply, demand, and value of money.