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:

Merchants

Individuals or businesses engaged in the trade of goods, especially those who buy and sell goods for profit.

Competitive Advantage

An advantage a company has over its competitors, enabling it to generate greater sales, margins, and retain more customers.

Inventory Surpluses

Excess stock that exceeds the demand, often resulting in storage challenges and potential financial losses.

Operating Efficiencies

The effectiveness and productivity with which an organization utilizes its resources in the process of producing goods or services.