Asked by
Benjamin Kincaid
on Dec 11, 2024
Verified
In the short run, a profit-maximizing firm in a price-taker market will definitely stop production if
A) economic profit is zero.
B) price falls below average total cost.
C) price is less than average variable cost.
D) it cannot completely cover its fixed costs.
Average Variable Cost
The per-unit variable cost of production, calculated by dividing total variable costs by the quantity of output produced.
Average Total Cost
The total cost of production (fixed plus variable costs) divided by the total quantity of output produced, representing the per unit cost of production.
- Pinpoint the conditions prompting a corporation to proceed, cut back, or cease its production efforts in the short-term.
Verified Answer
MH
Learning Objectives
- Pinpoint the conditions prompting a corporation to proceed, cut back, or cease its production efforts in the short-term.