Suppose That at the Current Level of Output, Price =

question 71

Multiple Choice

Suppose that at the current level of output, price = $12, MC = $4, AVC = $7, and ATC = $11. Which of the following is TRUE?

• A) The firm should decrease output.
• B) The firm should shut down.
• C) The firm should increase output.
• D) The firm should maintain the current level of output.

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Definitions:

Wages

are payments made to employees for their services, typically calculated on an hourly, daily, or piecework basis.

Withholding Allowances

Claims made by employees on their W-4 form to reduce the amount of federal income tax withheld from their paychecks.

Tax Liability

The total amount of tax owed by an individual or corporation to the tax authorities.

Monthly Schedule Depositor

A designation for businesses that determines how frequently they must deposit employment taxes to the IRS based on their payroll size.