If Total Revenue Exceeds Fixed Cost, a Firm

question 143

Multiple Choice

If total revenue exceeds fixed cost, a firm

• A)should produce in the short run.
• B)has covered its variable cost.
• C)is making short-run profits.
• D)may or may not produce in the short run, depending on whether total revenue covers variable cost.

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Definitions:

Productive

Describes a state or quality of producing a significant amount of output per unit of input, often associated with efficiency and effectiveness in economic terms.

Capital

Resources and assets, such as buildings, machinery, and equipment, used to produce goods and services.

Average Total Cost

The total cost of production divided by the number of goods produced; it consists of both fixed and variable costs.

Mixers

Devices used in cooking and baking to blend, beat, or whip ingredients together to form a mixture.