If the Price of a Product Is $12, Its Average

question 45

Multiple Choice

If the price of a product is $12, its average total cost is $2 and its average variable cost is $15 at the profit-maximizing output level,  in the short run the firm:

• A) should expand output until MR = MC.
• B) cannot cover total fixed costs.
• C) experiences a loss.
• D) must always shut down.

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Definitions:

Circadian Rhythms

Physical, mental, and behavioral changes that follow a daily cycle, primarily responding to light and darkness in an organism's environment.

Suprachiasmatic Nucleus

A small region in the brain’s hypothalamus responsible for controlling circadian rhythms, which are the body's internal biological clock.

Pineal Gland

A small endocrine gland in the brain that produces melatonin, a hormone that regulates sleep-wake cycles.

Melatonin

A hormone produced by the pineal gland that regulates sleep and wakefulness cycles.