Suppose the Price of a Product Is Less Than Its

question 48

Multiple Choice

Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely:

• A) make an economic profit.
• B) go out of business.
• C) expand to a bigger operation.
• D) continue to be shut down.
• E) break even.

---

Definitions:

National Saving

The total of private and public savings in a country, representing the portion of national income not consumed or spent by the government.

Closed Economy

A type of economic system where a country does not engage in trade with other countries, aiming to be self-sufficient.

Long-Term Bonds

Are debt securities with a maturity date extending beyond ten years, offering an investor fixed interest payments over a long duration.

Bond Buyer

An individual or entity that purchases bonds as a form of investment, looking to earn interest over time.