If a Firm's Short-Run Total Cost Curve Lies Above Its

question 105

Multiple Choice

If a firm's short-run total cost curve lies above its total revenue curve at all output levels,the firm should

• A)always shut down in the short run
• B)always operate in the short run
• C)operate in the short run if the maximum operating loss is less than its total fixed cost
• D)operate in the short run if the minimum operating loss is less than its total fixed cost
• E)operate in the short run if the average operating loss is less than its total fixed cost

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Definitions:

Production Processes

The sequence of operations or steps involved in manufacturing a product or delivering a service, from raw material to final product.

Production Rate

The speed at which products are manufactured or produced within a given time frame.

Volume Flexibility

The ability of a manufacturing or service system to economically adjust its output in response to fluctuations in demand.

Variety Flexibility

The ability of a manufacturing system or company to quickly adapt its operations to produce a wide range of products.