For a Particular Competitive Firm, the Minimum Value of Average

question 222

Multiple Choice

For a particular competitive firm, the minimum value of average variable cost (AVC) is $12 and is reached when 200 units of output are produced. For the same firm, the minimum value of average total cost (ATC) is $15 and is reached when 230 units of output are produced. Which of the following statements is correct?

• A)In the short run, the firm will shut down if the price of its product is $14.
• B)In the long run, the firm will shut down if the price of its product is $11.
• C)For this firm, the minimum value of variable cost (VC) is $2,400.
• D)If the firm's fixed cost (FC) amounts to $500, then the firm cannot earn a positive profit unless the price of its product exceeds $16.

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Definitions:

Make Deposits Window

A feature in accounting software where users can record and manage the deposit of funds into bank accounts.

Journal Entry

A record of a business transaction in an accounting system that affects at least two accounts, one debit and one credit.

Debits Checking

The process of recording or deducting sums of money from a checking account, based on transactions made.

Credits Undeposited

Funds received by a company that have not yet been deposited into the bank account.