When a Firm Chooses to Shutdown, It Is

question 33

Multiple Choice

When a firm chooses to shutdown, it is

• A)making a poor decision because it should always produce where marginal cost equals marginal revenue.
• B)making a poor decision because it should always produce where average costs exceed average revenue.
• C)making a good decision as long as the price it is getting is less than its average total costs.
• D)making a good decision as long as the price it is getting is less than its average variable costs.

---

Definitions:

Physiological Need

Physiological Need refers to basic physical requirements essential for human survival, such as food, water, and shelter, as defined in theories of motivation like Maslow's hierarchy of needs.

A Drive

A drive is a psychological state that motivates an organism to satisfy a need, often critical for survival, like hunger or thirst.

Sleepiness

A state of strong desire for sleep, or sleeping for unusually long periods (compare with fatigue).

A Need

An essential requirement or necessity for survival, well-being, or the accomplishment of a task.