If Market Price Is Greater Than or Equal to the Minimum

question 33

Multiple Choice

If market price is greater than or equal to the minimum of AVC but below the minimum of AC, then

• A)the firm will shut down.
• B)the firm will operate because its loss is less than if it shut down.
• C)revenue is lower than variable costs.
• D)profit is positive and so the firm will operate.

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Definitions:

Hopelessness

A feeling of despair or pessimism, believing that there is no possibility of a better future or solution to a problem.

Transition

The process or period of changing from one state or condition to another, often used in the context of careers, life stages, or writing.

Similarly

In a like manner or in a way that bears resemblance to another situation, process, or result.

Likewise

In a similar way; also an expression to show agreement with a previous statement or similarity between two contexts.