If a Competitive Firm Is Losing Money Then It Should

question 121

Multiple Choice

If a competitive firm is losing money then it should:

• A) always shut down.
• B) shut down if its losses are greater than total fixed costs.
• C) shut down if its total fixed costs are greater than losses.
• D) raise its price.

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Definitions:

Pyroclastic Flow

A fast-moving current of hot gas and volcanic materials that flows down the side of a volcano during an explosive eruption.

Sandstone

A sedimentary rock consisting of sand-sized mineral particles or rock fragments.

Basaltic Lava

A type of magma or lava that is low in silica and has a relatively low viscosity, leading to smoother flow characteristics.

Obsidian/Glass

A natural volcanic glass formed from the rapid cooling of acidic lava, known for its conchoidal fracture and sharp edges.