For a Perfectly Competitive Firm, If Price Is Greater Than

question 142

Multiple Choice

For a perfectly competitive firm, if price is greater than average variable cost at the profit-maximizing (or loss-minimizing) level of output, then it follows that

• A)total revenue is greater than total cost.
• B)total revenue is greater than total variable cost.
• C)the firm will benefit from shutting down in the short run.
• D)total revenue is greater than total fixed cost.

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Definitions:

Labor Supply Curve

A graphical representation showing the relationship between the number of hours workers are willing to work and the wage rate, typically illustrating that as wages increase, workers will supply more labor hours.

Preferences and Social Norms

The combination of individual desires and the influence of societal expectations on consumer behavior.

Factor of Production

An input used in the production of goods or services, such as labor, capital, land, or entrepreneurship.

Input

Resources such as labor, materials, and capital used in the production of goods and services.