Firms Will Always Suffer a Loss Only If the Price

question 130

Multiple Choice

Firms will always suffer a loss only if the price they charge is

• A) less than their minimum average total cost (ATC).
• B) equal to their minimum average variable cost (AVC).
• C) greater than their minimum average variable cost (AVC).
• D) greater than their minimum average total cost (ATC).
• E) equal to their minimum average total cost (ATC).

---

Definitions:

Dissolving

The process of a substance becoming incorporated into a liquid to form a solution, or metaphorically, the disintegration or ending of an entity or relationship.

Peace Dividend

The economic benefit and prosperity that results from the reduction of defense spending, typically occurring after the end of a major conflict.

Military Spending

The financial allocation by a government for maintaining and equipping its armed forces, including expenses for salaries, equipment, and operations.

Consumer Spending

The total value of goods and services purchased by households during a specific period, an important component of a country's gross domestic product (GDP).