Figure 7-5 Shows Cost and Revenue Curves for a Perfectly

question 40

Multiple Choice

Figure 7-5 shows cost and revenue curves for a perfectly competitive firm. If P represents the market price for a price-taking firm, the best course of action in the short run for the firm is to:Figure 7-5

• A)shut down immediately.
• B)continue operating because average total cost exceeds price.
• C)continue operating because price exceeds average total cost.
• D)continue operating because price exceeds average variable cost.
• E)increase its output.

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Definitions:

Equivocation

The fallacy of using a word with two different meanings in the premises and/or conclusion of an argument.

Jacket

An outer garment for the upper body, typically having sleeves and a fastening down the front.

Appeal to Ignorance

A fallacy that occurs when a lack of evidence is presented as evidence of the truth or falsehood of a claim.

Storm

A severe weather event characterized by strong winds, rain, snow, or other forms of precipitation and disturbances.