If Price Is Above Average Variable Cost and Below Average

question 143

Multiple Choice

If price is above average variable cost and below average total cost, a profit-maximizing price taker should

• A) immediately shut down; failing to do so is contrary to the idea of profit maximization in a competitive market.
• B) continue producing as long as it expects the market price to rise above average total cost in the near future.
• C) attempt to push price upward by slowly reducing output.
• D) cut price so more units can be sold.

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Definitions:

Racial Categories

Classifications of humans into groups based on physical traits, ancestry, genetics, or social relations, often used for societal and governmental identification.

Official Institutions

Formal organizations recognized by the government or society at large that play a significant role in public and administrative life.

Racial Formation

A process by which social, economic, and political forces determine the content and importance of racial categories, and by which they are in turn shaped by racial meanings.

Somatogenic

Pertaining to the idea that mental disorders originate from biological, physiological, or bodily causes.