When Price Is Below Average Variable Cost, a Firm in a Competitive

question 451

Multiple Choice

When price is below average variable cost, a firm in a competitive market will

• A)shut down and incur fixed costs.
• B)shut down and incur both variable and fixed costs.
• C)continue to operate as long as average revenue exceeds marginal cost.
• D)continue to operate as long as average revenue exceeds average fixed cost.

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Definitions:

Defendant

The person, party, or entity against whom a civil or criminal lawsuit is filed in a court of law.

Slander

The act of making false and damaging spoken statements about someone, leading to harming their reputation.

Libel

A published false statement that is damaging to a person's reputation; a written defamation.

Defamation

The act of damaging someone's reputation by making false and harmful statements.