If a Competitive Firm Finds That It Maximizes Short-Run Profits

question 3

Multiple Choice

If a competitive firm finds that it maximizes short-run profits by shutting down,which of the following must be TRUE?

• A) p < AVC for all levels of output.
• B) p < AVC only for the level of output at which p = MC.
• C) p < AVC only if the firm has no fixed costs.
• D) The firm will earn zero profit.

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Definitions:

Proven Track Record

Demonstrated history of achieving successful outcomes or performance in previous endeavors.

Motivational Systems

The processes and mechanisms that govern an individual's motivation, influencing their behavior and actions.

Single Motivator

A specific factor or condition that strongly influences an individual's behavior or actions.

Motivational Practice

Techniques or strategies designed to stimulate interest or enthusiasm towards achieving a goal.