Asked by
Tatyana Henry
on Oct 27, 2024
Verified
Consider a perfectly competitive firm in the short run.Assume that it is sustaining economic losses but continues to produce at the profit-maximizing (loss-minimizing) output.Which statement is FALSE?
A) Marginal cost is less than average total cost.
B) Marginal cost is equal to marginal revenue.
C) Price is equal to marginal cost.
D) Marginal cost is less than average variable cost.
Marginal Cost
The amount spent to produce an extra unit of a product or service.
Average Total Cost
The total cost divided by the quantity produced, representing the per-unit production cost.
Average Variable Cost
The total variable costs of production divided by the quantity of output produced.
- Understand the specific situations where a firm should either sustain its operational production or implement a temporary shutdown.
- Assess the relationship connecting a business's pricing tactics, marginal expenditure, comprehensive average cost, and average expense concerning variables.
Verified Answer
MM
Learning Objectives
- Understand the specific situations where a firm should either sustain its operational production or implement a temporary shutdown.
- Assess the relationship connecting a business's pricing tactics, marginal expenditure, comprehensive average cost, and average expense concerning variables.