A Firm Should Always Shut Down If Its Revenue Is

question 4

Multiple Choice

A firm should always shut down if its revenue is

• A) declining.
• B) less than its average fixed costs.
• C) less than its total costs.
• D) less than its avoidable costs.

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Definitions:

Monthly Fee

A recurring charge that consumers or businesses must pay for access to a product or service, typically charged on a monthly basis.

Intertemporal Price Discrimination

A pricing strategy where a seller varies the price of a good or service over time to maximize profits from different consumer willingness to pay.

Marginal Cost

The boost in aggregate expenses associated with producing an extra unit of a good or service.

Hardcover Books

A type of book characterized by a thick, rigid protective cover.