In the Short Run, a Firm Should Shut Down When

question 143

Multiple Choice

In the short run, a firm should shut down when

• A) P < AVC.
• B) P > MC.
• C) MR > MC.
• D) MR = ATC.

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Definitions:

Process Mean

The average of a set of process data points, indicating the central tendency of a process over a given period.

Assignable Variation

Assignable variation is variation in a process that can be traced to specific causes, such as machine malfunctions or operator errors, as opposed to random variation.

Average Run Length

The expected number of items inspected before a change is detected, commonly used in quality control.

False Alarm

An incorrect signal or detection indicating the presence of a condition or attribute that is not actually present.