In the Standard Model of Pure Competition, a Profit-Maximizing Firm

question 66

Multiple Choice

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if

• A)marginal cost is greater than average revenue.
• B)average cost is greater than average revenue.
• C)average fixed cost is greater than average revenue.
• D)total revenue is less than total variable cost.

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Definitions:

Economic System

An organized way a society structures its economic activities, such as production, distribution, and consumption of goods and services.

Socialism

A political and economic theory advocating for collective or governmental ownership and management of the means of production and distribution of goods.

Classless Society

A society in which hierarchical divisions based on economic status are absent, aiming for equal access to resources and opportunities for all.

Marx

Refers to Karl Marx, a 19th-century philosopher, economist, and political theorist whose works have influenced various fields, especially with his critique of capitalism and ideas about socialism and communism.