In the Short Run, a Profit-Maximizing Firm in a Price-Taker

question 105

Multiple Choice

In the short run, a profit-maximizing firm in a price-taker market will definitely stop production if

• A) economic profit is zero.
• B) price falls below average total cost.
• C) price is less than average variable cost.
• D) it cannot completely cover its fixed costs.

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Definitions:

General

Broadly inclusive, not limited to a specific category or group, or relating to the main or overall characteristics.

Well-defined Problem

A problem that has a clear goal, specified constraints, and a known solution path.

Constructing Proof

The process of creating a logical argument that demonstrates the truth of a statement or proposition.

Traffic Problem

A situation caused by a high volume of vehicles leading to congestion, delays, and accidents on roadways.