A Firm's Marginal Cost Has a Minimum Value of $80

question 114

Multiple Choice

A firm's marginal cost has a minimum value of $80, its average variable cost has a minimum value of $90, and its average total cost has a minimum value of $100. Then the firm will shut down in the short run once the price of its product falls below

• A) $100.
• B) $90.
• C) $80.
• D) $40.

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Definitions:

Financial Performance

A measure of a company's profit, revenue, expenses, and cash flow, indicating how well it can generate earnings relative to its revenue, assets, equity, and other aspects of its business.

Risk

Exposure to the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility.

Mutual Coercion

A concept often applied in social sciences referring to the use of regulations or laws to limit behaviors that are harmful to the community.

Tragedy Of The Commons

A situation in which individual users deplete or spoil a shared resource due to collective overuse.