If a Firm Is Currently Equating MR and MC and Product

question 63

Multiple Choice

If a firm is currently equating MR and MC and product price = $24, AVC = $22, and ATC = $26, then in the long run this firm:

• A) will continue to operate at a loss.
• B) will earn a positive profit.
• C) will go out of business.
• D) should increase output.
• E) should decrease price.

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Definitions:

Walmart

Walmart is a multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, known for its wide range of products at low prices.

Conventional Supermarket

Type of retailer that offers groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format.

Retailing Partner

A business that sells products or services to consumers for personal or household consumption.

Full Range

Denotes offering a complete or comprehensive selection of products, services, or options within a certain category.