Which of the Following Is Not a Valid Generalization Concerning

question 38

Multiple Choice

Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run?

• A) Price must be at least equal to average total cost.
• B) Price times quantity produced must be equal to or greater than total variable cost for some level of output or the firm will close down in the short run.
• C) Price may be equal to, greater than, or less than average total cost.
• D) Price must be equal to or greater than minimum average variable cost for the firm to continue producing.

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Definitions:

Free Trade Zones

Designated areas where goods can be imported, handled, manufactured, and re-exported under specific customs regulation but generally not subject to customs duty.

Developing Countries

Countries with a lower level of economic development, characterized by lower industrialization, lower income per capita, and often higher levels of poverty compared to developed countries.

Duties and Tariffs

Taxes imposed by governments on the import and export of goods.

Facilities

Physical buildings and infrastructures that are used for the production, handling, or storage of goods.