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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