Suppose That Price Is Below the Minimum Average Total Cost

question 63

Multiple Choice

Suppose that price is below the minimum average total cost but above the minimum average variable cost. In the short run, a firm that is a price taker would:

• A) immediately shut down and get out of the industry.
• B) continue to produce a quantity such that marginal revenue equals marginal cost.
• C) shut down temporarily, in hopes of restarting in the near future.
• D) cut price and expand output in hopes of achieving economies of scale

Recognize and interpret nonverbal cues in communication.

Distinguish between various types of responses and their effects on communication (e.g., confirming vs. disconfirming).

Identify barriers to effective listening and strategies to overcome them.

Apply the principles of adaptation in different communication contexts.

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Definitions:

Net Income

The amount of total revenues that exceeds total expenses of a company during a specific time period.

Earnings Per Share

A profitability metric that measures the amount of net income earned per share of a company's outstanding stock.

Dividends Per Share

The amount of dividend a company pays out for each share of its stock over a specific period, typically a quarter or year.