If Your Firm Is Producing a Good at a Level

question 7

Multiple Choice

If your firm is producing a good at a level where marginal revenue equals marginal cost, and price is greater than average total cost, your firm

• A) should shut down and suffer a loss equal to your fixed costs.
• B) is earning an economic profit greater than zero.
• C) should decrease output.
• D) should increase output.

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Definitions:

Enforceable Rules

Regulations or directives that can be legally imposed or executed by a governing authority.

Commercial Relationships

Commercial relationships involve interactions and exchanges between businesses or between businesses and consumers, focused on the buying, selling, or trading of goods or services.

National Conference

A large formal gathering that focuses on specific issues or topics, typically organized on a national level, involving participants from across the country.

Commissioners

Officials or a board charged with the administration or regulation of certain laws and services in a specific area or field.