If the Price Is Less Than the Average Variable Cost

question 83

Multiple Choice

If the price is less than the average variable cost then

• A)The loss the firm makes from shutting down (its TFC)is less than the loss they make as a result of producing.
• B)The loss the firm makes from shutting down (its TFC)is greater than the loss they make as a result of producing.
• C)The firm should produce where MC=MR.
• D)The firm should produce where AVC is minimized.

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Definitions:

Primary

Refers to the first or most significant condition, factor, or level in a series or system.

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, as well as for certain younger people with disabilities or specific diseases.

Medical Expenses

Costs incurred in the prevention or treatment of injury or disease, including fees for physician services, medications, and hospital stays.

Independent Practice Association

An organization of independent physicians, or other healthcare providers, that contracts with health plans or directly with patients to provide care within negotiated price and service constraints.