Firms Will Be Indifferent About Shutting Down or Producing If

question 150

Multiple Choice

Firms will be indifferent about shutting down or producing if the price they charge is

• A) less than their minimum average total cost (ATC).
• B) less than 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 variable cost (AVC).

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Definitions:

Annual Rate

The interest rate for a whole year, as opposed to just a monthly or daily rate.

Days

A unit of time equivalent to 24 hours, often used to measure durations or intervals.

Grow

To grow or expand in size, volume, or intensity as time progresses.

Annual Rate

The interest rate for a loan or investment over the span of one year.