​A Firm Sets Its Price at $10

question 15

Multiple Choice

​A firm sets its price at $10.00 per unit.It has an average variable cost of $8.00 and an average fixed cost of $4.00 per unit.In the short run,this firm is

• A)​incurring a loss of $2.00 per unit and should shut down.
• B)unable to cover all of its fixed cost and hence should shut down.
• C)incurring a profit.
• D)​incurring a loss per unit of $2.00,but since it can still cover its variable costs,should continue to operate

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Definitions:

Variable

A factor, characteristic, or detail that can alter or shift.

Quantity

A property that can exist as a magnitude or multitude, often measurable and expressed as a number or amount.

Quality

An attribute or a property characteristics of an object, person, or something else.

Quantified Existential

A logical term referring to statements that quantify the existence of some entity or entities in a particular domain.