Scenario: the Fixed Cost of Producing 500 Units of Good

question 106

Multiple Choice

Scenario: The fixed cost of producing 500 units of Good Y is $25,000, while the variable cost of producing 500 units of Good Y is $60,000.
-Refer to the scenario above.If the market for Good Y is monopolistically competitive,a firm producing Good Y will shut down production in the short run if price falls below ________.

• A) $60
• B) $200
• C) $120
• D) $50

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Definitions:

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of assets, typically expressed as an annual rate.

Consumes

The action of using up a good or service to satisfy needs or wants.

Consumption

The process by which goods and services are used up by consumers, representing the end phase of the economic cycle.

Income

Financial gains, customarily on a constant basis, from vocational activities or investments.