When a Profit-Maximizing Firm's Fixed Costs Are Considered Sunk in the Short

question 379

Multiple Choice

When a profit-maximizing firm's fixed costs are considered sunk in the short run, then the firm

• A)can set price above marginal cost.
• B)must set price below average total cost.
• C)will never show losses.
• D)can safely ignore fixed costs when deciding how much output to produce.

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Definitions:

American Banks

Financial institutions located within the United States, operating under U.S. banking laws and regulations.

American Overseas Investments

Financial investments made by individuals or entities based in the United States in business interests or assets in other countries.

Adverse Balance

A situation where a country's imports exceed its exports, leading to a negative balance of trade.

Foreign Trade

The exchange of goods, services, and capital between countries, crossing national borders.