If Price Is Greater Than the Average Variable Cost,a Profit-Maximizing

question 217

Multiple Choice

If price is greater than the average variable cost,a profit-maximizing firm should ________.

• A) contract production until price is equal to marginal cost
• B) expand production until price is equal to marginal cost
• C) contract production until total revenue is equal to total cost
• D) expand production until total revenue is equal to total cost

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Definitions:

Police Protection

Services provided by law enforcement agencies to ensure public safety and enforce the law.

Taxation

The process by which governments impose financial charges on individuals or entities, which funds public spending and services.

Voluntarily Pay

A scenario where payments are made without legal obligation, often as a gesture of goodwill or charity.

Antitrust Laws

Prohibitions against price fixing and other anticompetitive practices.