A Firm Operating in a Competitive Market Will Stay in Business

question 78

True/False

A firm operating in a competitive market will stay in business in the short run so long as the market price exceeds the firm's average total cost; otherwise, the firm will shut down.

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Definitions:

Labor

Labor represents the human effort, both physical and intellectual, used in the production of goods and services.

Maximize Utility

An economic principle where individuals or firms aim to achieve the highest satisfaction or profit from their choices.

Households

Units consisting of one or more people who live in the same dwelling and share meals or living accommodation; considered as a single entity for economic analysis.

Satisfaction

The feeling of fulfillment or pleasure derived from achieving a goal, satisfying a desire, or meeting a need.