-Refer to the Above Figure

question 270

Multiple Choice

-Refer to the above figure. In order to stay open in the short run, this firm must

• A) earn a positive profit.
• B) receive a price equal to or greater than the minimum of its average variable cost.
• C) receive a price exactly equal to its average total cost.
• D) recover its fixed cost.

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Definitions:

Average Daily Receipts

The average amount of cash flow received by a business per day over a defined period of time.

Collection Delay

The time lag between when a sale is made and when the payment is actually received, affecting cash flow.

Average Amount

The sum of individual amounts divided by the number of amounts, representing a central value or typical amount in a set of data.

Weighted Average Delay

An estimation of the average delay in time, considering the relative importance or weight of each contributing factor.