Asked by Mindy Bounheuangvilay on Jul 02, 2024
In order to continue operating,in the long-run a firm must
A) Charge a price equal to its AVC
B) Charge a price equal to its AFC
C) Charge a price equal to its AC
D) None of the above
Long-Run
Pertains to a period in which all factors of production and costs are variable, allowing companies to adjust all inputs.
AVC
Average Variable Cost, the total variable cost divided by the number of units produced, reflecting costs that change with output.
- Identify the circumstances under which ceasing a firm's activities in both the short run and long run becomes essential.
- Ascertain and expound the significance of average variable costs, cumulative average costs, and price in the strategic process of shutting down.
Learning Objectives
- Identify the circumstances under which ceasing a firm's activities in both the short run and long run becomes essential.
- Ascertain and expound the significance of average variable costs, cumulative average costs, and price in the strategic process of shutting down.