If the Price Is Less Than the Average Variable Cost

question 282

Multiple Choice

If the price is less than the average variable cost at the quantity of output where MR = MC,in the short run a perfectly competitive firm will:

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

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Definitions:

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Reciprocal

Concerning a mutual action or relationship where two or more subjects impact each other in the same way.

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A condition that results from eating a diet in which nutrients are either not enough or are too much, causing health problems.