Consider a Firm with the Following Cost and Revenue Information

question 96

Multiple Choice

Consider a firm with the following cost and revenue information: ATC = $8,AVC = $6,MR = $6,and MC = $6.If the firm produces Q = 60 units in the short run,it:

• A)is minimising losses.
• B)makes a total loss of $60.
• C)should produce more output.
• D)is making a mistake and should shut down.
• E)is indifferent concerning whether to keep operating or shut down.

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Definitions:

Seal

A device or symbol used to authenticate documents as genuine or to signify approval or ratification.

Consideration

A concept in contract law, referring to something of value exchanged between parties as part of an agreement.

Gratuitous Promise

A voluntary promise or agreement without consideration, where the promisor is not legally bound to fulfill the promise.

Common Law

A legal system based on judicial decisions and precedents rather than statutory laws, common in many English-speaking countries.