When Price Exceeds Average Variable Cost in the Short Run

question 558

Multiple Choice

When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because

• A)the position of the marginal cost curve determines the price for which the firm should sell its product.
• B)among the various cost curves, the marginal cost curve is the only one that slopes upward.
• C)the marginal cost curve determines the quantity of output the firm is willing to supply at any price.
• D)the firm is aware that marginal revenue must exceed marginal cost in order for profit to be maximized.

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Definitions:

Obsessive-Compulsive Personality Disorder

A psychological condition marked by a consistent focus on maintaining neatness, striving for perfection, and dominating personal and social interactions, which comes at the cost of being flexible, open, and productive.

Negative Affectivity

A personality characteristic that involves the experience of negative emotions and poor self-concept.

Schizotypal Personality Disorder

Chronic pattern of inhibited or inappropriate emotion and social behavior as well as aberrant cognitions and disorganized speech.

Psychoticism

A personality trait marked by aggressiveness, impulsivity, and a lack of empathy, often associated with risk for psychotic disorders.