Assume That at the Current Level of Output,price Equals Marginal

question 60

True/False

Assume that at the current level of output,price equals marginal revenue,but is less than average total cost.So long as price is greater than average variable cost,the firm should continue to operate in the short run to minimize its losses.

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Definitions:

Behavioral Economics

A field of economics that examines how psychological, social, cognitive, and emotional factors influence the economic decisions of individuals and institutions, and how those decisions vary from those implied by classical theory.

Loss Aversion

In prospect theory, the property of most people’s preferences that the pain generated by losses feels substantially more intense than the pleasure generated by gains.

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.

Loss Aversion

A cognitive bias where individuals fear losses more than they value equivalent gains.