If Total Variable Cost Exceeds Total Revenue at All Output

question 72

Multiple Choice

If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm

• A)should produce in the short run.
• B)is making short-run profits.
• C)should shut down in the short run.
• D)has covered its fixed cost.

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Definitions:

Risk Averse

A preference for avoiding loss over making a gain.

Marginal Utility

The extra pleasure or benefit gained from using one more unit of a product or service.

Utilitarian Justice

A principle focusing on the greatest happiness or benefit for the greatest number of people as the measure of what is just.

Rawlsian Justice

A theory of justice developed by John Rawls that emphasizes equal basic rights, equality of opportunity, and the promotion of the interests of the least advantaged members of society.