A Firm Will Shut Down in the Short Run If

question 114

Multiple Choice

A firm will shut down in the short run if

• A)MR
• B)MR > AVC.
• C)AVC
• D)P > MC.

Identify the types of legal work undertaken by freelance paralegals.

Understand the concept of marginal external costs and benefits in economic activities.

Analyze the effects of externalities on social efficiency and optimal resource allocation.

Evaluate the role and impact of government interventions, such as taxes and standards, in correcting market inefficiencies.

---

Definitions:

Actual Manufacturing Overhead Cost

The actual costs incurred for indirect manufacturing expenses, such as utilities, rent, and maintenance.

Year

A period of time consisting of 12 months or 365 days, used as a basic unit for measuring time in relation to the earth's orbit around the sun.

Cost of Goods Available for Sale

The total cost of inventory that a business has ready for sale, comprising both beginning inventory plus the cost of goods manufactured.

Overapplied

A situation where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead costs incurred, resulting in an apparent surplus.