If a Competitive Firm Is Losing Money Then It Should

question 121

Multiple Choice

If a competitive firm is losing money then it should:

• A) always shut down.
• B) shut down if its losses are greater than total fixed costs.
• C) shut down if its total fixed costs are greater than losses.
• D) raise its price.

---

Definitions:

Mudflows

Rapid downhill movements of water-saturated earth material, primarily composed of mud and often triggered by heavy rainfall or volcanic activity.

Basaltic Lava

A type of molten rock that emerges from volcanoes or fissures on the Earth's surface, known for its low viscosity due to low silica content.

Catastrophic Melting

Rapid melting of ice or snow, often due to volcanic activity or sudden climate change, that can lead to significant water flow or flooding.

Pyroclastic Flow

A fast-moving current of hot gas and volcanic materials (ash, lava fragments) that flows down the sides of a volcano during an explosive eruption.