A firm suffering economic losses decides whether or not to produce in the short run on the basis of whether
A. revenues from operating are sufficient to cover fixed costs.
B. revenues from operating are sufficient to cover fixed plus variable costs.
C. revenues cover variable costs.
D. Firms suffering economic losses will always shut down.
Answer: C
You might also like to view...
Which of the following statements is NOT an assumption underlying the production possibilities curve?
A) Resources are fully and efficiently employed. B) Technology is fixed. C) Production occurs over some specified time period. D) The amount of resources available for production can be changed quickly.
Each of the following factors might interfere with the efficiency of perfect competition except:
a. increasing returns to scale. b. imperfect price information. c. externalities. d. diminishing returns to scale.