If Price Is Less Than Average Variable Cost at a Level

question 174

Multiple Choice

If price is less than average variable cost at a level of output where marginal revenue is equal to marginal cost, then in the short run the firm

• A) should shut down.
• B) should produce the level of output where marginal revenue equals marginal cost.
• C) should gather more data to determine whether to shut down.
• D) will produce only if they can decrease their fixed costs.

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Definitions:

Musculoskeletal

Pertaining to the muscles and the skeleton, especially relating to the system that supports the body and enables movement.

Nephrology

The branch of medicine that focuses on the diagnosis and treatment of kidney diseases.

Plural

The grammatical form used to denote more than one of a particular object or concept.

Singular

Being one of a kind; unique, or referring to a single form or instance of something.