A Firm Is Currently Producing at the Point Where MC

question 32

Multiple Choice

A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $5.50. What do you recommend this firm do?

• A) Increase production above the current output rate, because MC = MR at this rate of output.
• B) Continue to produce the current output rate, because P > AVC.
• C) Shut down, because AVC > P.
• D) Shut down, because ATC > P.

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Definitions:

Fallacy Of Subjectivism

A logical fallacy that occurs when someone argues that something is true or good merely because it is true or good for them personally.

Fallacy

An error in reasoning that renders an argument logically invalid.

Religious Beliefs

Encompasses the diverse convictions and doctrines about the sacred, the divine, or the spiritual that influence moral, ethical, and social values.

Appeal To Force

A fallacious argument where one tries to persuade others to accept a conclusion by using threats or force rather than logic.