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:

Token Economy

A behavior modification system that uses tokens as rewards for desired behaviors, which can be exchanged for privileges or other rewards.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior.

Positive Reinforcers

Stimuli that, when presented after a behavior, increase the likelihood of that behavior being repeated.

Behavior Modification

A therapeutic approach aimed at changing undesirable behaviors through reinforcement techniques.