Which of the Following Statements Is Correct

question 234

Multiple Choice

Which of the following statements is correct?

• A) In order to maximize profits in the short run, a price taker should always produce at the output level where marginal cost is equal to price.
• B) In long-run equilibrium, a price taker will produce at an output level where average total cost is at its minimum.
• C) A price taker will remain open in the short run, even if it is earning an economic loss, so long as price is sufficient to cover average variable cost.
• D) All of the above are true.

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