If the Owner of the Firm, Shown Above Is a Profit

question 9

Multiple Choice

If the owner of the firm, shown above is a profit maximizer, the firm should ______ in the short run.

• A)continue to operate at the existing output
• B)shutdown
• C)expand output to lower costs
• D)More data is needed to say definitively what the firm should do.

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Definitions:

Catalog

A systematic list of items, which may include books, products, or collections, usually with descriptive details.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," indicating that the buyer assumes the risk about the quality of the goods being purchased.

Implied Warranty of Fitness

A legal doctrine that suggests that when a seller knows the specific purpose for which an item is purchased, the item is guaranteed to be fit for that particular purpose.

Product Liability Theories

Legal doctrines that hold manufacturers, distributors, suppliers, retailers, and others who make products available to the public responsible for the injuries those products cause.