In the Long Run, All of a Firm's Costs Are

question 580

Multiple Choice

In the long run, all of a firm's costs are variable. In this case the exit criterion for a profit-maximizing firm is to shut down if

• A)price is less than average total cost.
• B)price is greater than average total cost.
• C)average revenue is greater than average fixed cost.
• D)average revenue is greater than marginal cost.

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Definitions:

Customer Demand

The desire and willingness of consumers to purchase goods or services at a given price over a specific time period.

Management's Commitment

The dedication and proactive involvement of a company's management team in implementing and achieving strategic goals, often reflecting the organization's values and culture.

Promotional Budget

The allocation of financial resources dedicated to marketing, advertising, and promoting a product or service.

Deceptive Pricing

A misleading practice where prices are manipulated or hidden to make products appear cheaper than they actually are.