If Price Is Less Than Its Minimum Average Variable Cost

question 78

Multiple Choice

If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run

• A)cannot cover any of its variable cost
• B)incurs a loss greater than its fixed cost
• C)can cover all of its fixed cost and some of its variable cost
• D)can cover all of its variable cost and some of its fixed cost
• E)can cover both its fixed costs and its variable cost

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Definitions:

Unfreezing Process

The initial stage of change in an organization, aiming to dismantle existing mindsets and strategies.

Survival Anxiety

A motivational factor that drives individuals or organizations to change due to the fear of failure or extinction.

Current Behaviours

Observable actions or conduct of individuals in the present, often assessed in organizational contexts for performance evaluations or development planning.

Double-Loop Learning

A learning process where, in addition to making adjustments based on errors, underlying policies and objectives are also questioned and potentially altered.