If TR < TVC, a Firm Would ________ in the Short

question 317

Multiple Choice

If TR < TVC, a firm would ________ in the short run and ________ in the long run.

• A) operate; expand
• B) operate; exit the industry
• C) not operate; expand
• D) shut down; exit the industry

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Definitions:

Least-Squares Regression

The least-squares regression is a statistical method used to determine a line of best fit by minimizing the sum of squares created by a mathematical function.

Curvilinear Cost

A cost behavior that does not consistently increase or decrease but varies based on changes in activity level, illustrating a non-linear relationship.

Mixed Cost

A cost that contains a combination of fixed and variable components and changes in total with the level of output or activity.

Step-Wise Cost

Costs that remain fixed for certain levels of production but can change to a different fixed rate when production levels increase or decrease.