If a Profit-Maximizing Firm Finds That Price Exceeds Average Variable

question 115

Multiple Choice

If a profit-maximizing firm finds that price exceeds average variable cost and marginal revenue is greater than marginal cost,it should:

• A) reduce output, but continue producing in the short run.
• B) increase output.
• C) shut down.
• D) not alter its production level since it is earning a profit.

---

Definitions:

Right-Brain Dominant

A descriptive term for individuals who are more adept at visual and intuitive tasks, often associated with creativity and imagination.

Visual Learner

An individual who learns best by seeing or visualizing information, often preferring images, diagrams, and videos over text.

Auditory Learning

A learning style in which individuals learn best through listening to lectures, discussions, and other forms of verbal communication.

Sample Tests

Practice examinations designed to mimic the format, style, and content of actual tests, allowing individuals to prepare and gauge their readiness.