Asked by
veerabhadrarao miriyala d. n.
on Nov 04, 2024
Verified
A perfectly competitive firm, Paula's Pineapple Farm, is incurring a loss. In the short run it should continue to produce if ________, but in the long run, if there is no change in economic conditions, it should exit the industry.
A) price is below minimum AVC
B) price is above minimum ATC
C) price is above minimum AVC
D) price is equal to minimum ATC
Minimum AVC
The lowest point of the average variable cost curve where each unit of production is at its cheapest.
Short Run
A period during which at least one factor of production is fixed, leading to limitations in output adjustment.
Long Run
A period of time in which all factors of production and costs are variable, allowing for full industry adjustment to changes.
- Understand the factors influencing a corporation's decision to operate, enlarge, downsize, or exit within short-term and long-term horizons.
- Apply concepts of average variable cost, average total cost, and marginal cost in decision-making processes.
Verified Answer
KL
Learning Objectives
- Understand the factors influencing a corporation's decision to operate, enlarge, downsize, or exit within short-term and long-term horizons.
- Apply concepts of average variable cost, average total cost, and marginal cost in decision-making processes.