When Choosing the Production Level for Tomorrow You Find That

question 29

Multiple Choice

When choosing the production level for tomorrow you find that at an output of 100 units, the total variable costs are $20,000 and the average fixed cost is only $50. If the market price is $200, you should:

• A) b or e.
• B) shut down.
• C) produce more than 100 units.
• D) produce fewer than 100 units.
• E) produce where MC = MR.

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Definitions:

Trade Adjustment Assistance

A federal program offering aid to workers who lose their jobs or whose hours and wages are reduced due to the impact of international trade.

Subsidies

Financial support provided by the government to businesses, individuals, or other governmental bodies, intended to encourage production, reduce prices, or support activities deemed beneficial.

Foreign Firms

Companies that operate in a country other than where their headquarters are located.

Import Tariff

A tax imposed by a government on goods and services imported from other countries, intended to protect domestic industries and adjust trade balances.