Suppose a Firm Is Trying to Decide Whether or Not

question 85

Multiple Choice

Suppose a firm is trying to decide whether or not to temporarily shut down to minimize total loss. If price equals average variable cost, then

• A)total revenue equals total fixed cost, and the loss equals total variable cost.
• B)total revenue equals total variable cost, and the loss equals total fixed cost.
• C)total fixed cost is zero.
• D)total variable cost equals total fixed cost.
• E)total cost equals total variable cost.

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Definitions:

Cognitive Distancing

The practice of observing one's thoughts and beliefs as temporary, rather than accurate reflections of reality, allowing for a more objective and less emotional response.

Suppress

To consciously or unconsciously prevent the expression or development of emotions, thoughts, or behaviors.

Objectivity

The quality of being unbiased, fair, and impartial; an essential aspect of scientific research and clinical assessment.

Acceptance

The act of receiving something offered, favorably regarding something, or the acknowledgment of reality without an attempt to change it.