Suppose a Profit-Maximizing Firm in a Competitive Market Produces Rubber

question 103

Multiple Choice

Suppose a profit-maximizing firm in a competitive market produces rubber bands.When the market price for rubber bands falls below the minimum of its average total cost,but still lies above the minimum of average variable cost,the firm

• A)will experience losses but will continue to produce rubber bands.
• B)will shut down.
• C)will be earning both economic and accounting profits.
• D)should raise the price of its product.

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Definitions:

Encouragement

The act of giving support, confidence, or hope to someone, often motivating them to continue a course of action.

Humanism

A theory that stresses the potential of all humans, who have the same basic needs, regardless of culture, gender, or background.

Psychological

Pertaining to the mind or mental processes, emotional states, and behavior, often focusing on how these aspects influence individuals and their interactions with others.

Professionals

Professionals are individuals who possess specialized knowledge and skills in a particular field, often requiring formal qualifications and bound by certain standards of conduct.