In the Short Run, a Profit-Maximizing Price Taker Will Expand

question 129

Multiple Choice

In the short run, a profit-maximizing price taker will expand output as long as the market price exceeds

• A) average variable cost.
• B) marginal cost.
• C) average total cost.
• D) average fixed cost.

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Definitions:

Aggregate Demand

It refers to the total demand for all goods and services within a particular economy at current price levels.

Long Run

A period in economics where all factors of production and costs are variable, allowing companies to adjust to market demands.

Prices

The amount of money required to purchase a good or service, serving as a signal for scarcity and demand in the market.

Unemployment

The condition of being jobless and actively seeking employment.