If Price Is Less Than Its Minimum Average Variable Cost

question 78

Multiple Choice

If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run

• A)cannot cover any of its variable cost
• B)incurs a loss greater than its fixed cost
• C)can cover all of its fixed cost and some of its variable cost
• D)can cover all of its variable cost and some of its fixed cost
• E)can cover both its fixed costs and its variable cost

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Definitions:

Dutch Elm Disease

Dutch Elm Disease is a fungal disease spread by bark beetles, primarily affecting elm trees, leading to foliage wilting, branch dieback, and potentially the death of the tree.

Chestnut Blight

A fungal disease caused by Cryphonectria parasitica, which has devastated chestnut trees in North America by causing cankers that girdle and kill the trees.

Net Productivity

is the rate at which energy or biomass accumulates in an ecosystem's producers, after subtracting the energy used in respiration, representing the amount of new biological material.

Mineral Release

The process by which minerals become available to organisms in the environment, often through the weathering of rocks or decomposition of organic matter.