If Total Variable Cost Exceeds Total Revenue at All Output

question 72

Multiple Choice

If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm

• A)should produce in the short run.
• B)is making short-run profits.
• C)should shut down in the short run.
• D)has covered its fixed cost.

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Definitions:

Promoters

Individuals or companies that undertake the preliminary activities of organizing or setting up a new business or venture.

Preincorporation Contract

An agreement made by the promoters of a company before it is legally incorporated.

Liable

Having legal responsibility or obligation.

Articles of Incorporation

A document filed with a state government to legally document the creation of a corporation.