Mrs Smith Operates a Business in a Competitive Market

question 546

Multiple Choice

Mrs. Smith operates a business in a competitive market. The current market price is $8.10. At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25. Mrs. Smith should

• A)shut down her business in the short run but continue to operate in the long run.
• B)continue to operate in the short run but shut down in the long run.
• C)continue to operate in both the short run and long run.
• D)shut down in both the short run and long run.

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Definitions:

Paternalistic Father-knows-best

A leadership or management style where decision-making is guided by a belief in the leaders' superior knowledge and experience, similar to a father's role in a family.

Opportunistic

Refers to an approach or action taken with the aim of exploiting situations to one's advantage, often with little regard for principles or consequences.

Country Club Manager

A leadership style characterized by high concern for people and low concern for production tasks.

Task Structure

The degree of clarity, or ambiguity, in the work activities assigned to the group.