When Companies Do NOT Want to Use Market Prices or Find

question 50

Multiple Choice

When companies do NOT want to use market prices or find it too costly, they typically use ________ prices, even though suboptimal decisions may occur.

• A)average-cost
• B)full-cost
• C)long-run cost
• D)short-run average cost

---

Definitions:

Short-run Supply Curve

A graphical representation showing the quantity of a good a firm is willing to supply at different prices in a short time frame, typically with some fixed inputs.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies as the quantity of the good produced changes.

Average Fixed Cost

The fixed cost per unit of output.