A Firm Would Decide to Shut Down If Its Production

question 286

Multiple Choice

A firm would decide to shut down if its production resulted in

• A)MR < ATC.
• B)ATC > AVC.
• C)AFC > AVC.
• D)MR < AVC.

---

Definitions:

Consumer Durables

Goods that are not for immediate consumption and can be used repeatedly over a period of time, such as appliances, cars, and furniture.

Autonomous Consumption

Spending by consumers that is not influenced by changes in current income levels, typically covering basic necessities.

Disposable Income

The pool of funds households have for saving and spending pursuits after income taxes are factored out.

Consumption

The use of goods and services by households, constituting a major part of the economy's total output.