If Total Revenue Is Greater Than Variable Cost but Less

question 93

Multiple Choice

If total revenue is greater than variable cost but less than total costs, the firm should

• A)remain in operation because revenues are sufficient to cover variable costs and some fixed costs.
• B)shut down because revenue is not sufficient to cover all costs.
• C)not make any decisions until it hires an economist.
• D)remain in operation because revenue is sufficient to cover all fixed costs.
• E)shut down because P is less than ATC.

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Definitions:

Fire Insurance

A type of property insurance that covers damage and losses caused by fire, providing financial protection to property owners.

Random Variable

A variable whose values depend on outcomes of a probabilistic phenomenon, often used in statistics and probability theory.

Future Price

The predicted price of a commodity, security, or currency in a futures contract for delivery and payment at a specified future date.

General Motors

A multinational corporation based in the United States that designs, manufactures, markets, and distributes vehicles and vehicle parts.