A Company Produces at an Output Level Where Marginal Revenue

question 113

Multiple Choice

A company produces at an output level where marginal revenue is equal to marginal cost and has the following revenue and cost levels:
Marginal cost curve intersects the average variable cost curve at $140.
Marginal cost curve intersects the average total cost curve at $150.
Marginal cost curve intersects the marginal revenue curve at $200.
What would you suggest this firm should do in the short run?

• A) The firm should shut down.
• B) The firm should continue to produce at a loss.
• C) The firm should continue to produce at a profit level of $10 per unit.
• D) The firm should continue to produce at a profit level of $50 per unit.
• E) The firm should continue to produce at a profit level of $60 per unit.

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Definitions:

Subtyping

The process of classifying members of a category into smaller groups based on specific characteristics.

Implicit Attitudes

Unconscious beliefs or feelings towards objects, people, or concepts, which can influence behavior without conscious awareness.

Explicit Attitudes

Attitudes that are consciously recognized and expressed by individuals, reflecting their beliefs or feelings towards an object or subject.

Unconscious Level

A part of the mind that is inaccessible to the conscious mind but that affects behavior and emotions.