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:

Imprinting

The process by which certain animals form attachments during a critical period very early in life.

Assimilation

In cognitive development, Jean Piaget's concept where individuals integrate new information into existing cognitive schemas or frameworks.

Existing Schemas

Mental structures or frameworks that organize and interpret information, influencing cognition and perception.

Egocentrism

In Piaget’s theory, the preoperational child’s difficulty taking another’s point of view.