Answered: If the price of the firm is less than…

If the price of the firm is less than average total cost. This situation is Select one: a. Shut Down Ob. Minimum Loss Oc. Accounting profit Od. Normal profit

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 20RQ: What two lines on a cost curve diagram intersect at the zero-profit point?

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

If the price of the firm is less than average total cost. This situation is

Select one:

a. Shut Down

Ob. Minimum Loss

Oc. Accounting profit

Od. Normal profit

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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