Suppose That When a Firm Produces the Level of Output

question 104

Multiple Choice

Suppose that when a firm produces the level of output at which price equals marginal cost, the firm's total revenue is less than its variable cost. In this case, the firm should:

• A)not change its level of output even if it's earning an economic loss in the short run.
• B)shut down.
• C)produce more so that its total revenue increases.
• D)purchase more fixed factors of production.

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Definitions:

Neurotransmitter

Substances in the brain that facilitate the transmission of signals between neurons across synaptic gaps.

Serotonin

A neurotransmitter in the brain that is involved in the regulation of mood, appetite, and sleep, among other functions.

Carbohydrates

Organic compounds, including sugars, starches, and cellulose, which are a major source of energy for the body.

Basal Metabolic Rate

The amount of energy per unit time that a person needs to maintain the functioning of their body at rest.