Which of the following best describes what is true for a firm to be willing to produce in both the short run and the long run?

Choose 1 answer:
(A) $P \geq A V C$ in the short run; $P \leq A T C$ in the long run.
(B) $P=A V C$ in the short run; $P

Q: Which of the following best describes what is true for a firm to be willing to produce in both the short run and the long run? Choose 1 answer: (A) $P \geq A V C$ in the short run; $P \leq A T C$ in the long run. (B) $P=A V C$ in the short run; $P<A T C$ in the long run (C) $P \geq A V C$ in the short run; $P \geq A T C$ in the long run. (D) $P<A V C$ in the short run; $P \geq A T C$ in the long run (E) $P<A V C$ in the short run; $P \leq A T C$ in the long run

∻Solution∻ ‖ a ⋮ Short Run Production Decision: In the short run, a firm will be willing to produce as long as the price (P) it receives for its product is greater than or equal to the average variable cost (AVC). If P is less than AVC, the firm would not cover its variable costs and would minimize its losses by shutting down production. ‖ ‖ b ⋮ Long Run Production Decision: In the long run, a firm will be willing to produce if the price (P) it receives is greater than or equal to the average total cost (ATC). This is because, in the long run, all costs are variable and a firm must cover both variable and fixed costs to remain in business. If P is less than ATC, the firm would not be able to cover all its costs and would exit the industry. ‖ ∻Answer∻ ⚹ (C) $P \geq AVC$ in the short run; $P \geq ATC$ in the long run. ⚹ ∻Key Concept∻ ⚹ Firm's Willingness to Produce ⚹ ∻Explanation∻ ⚹ A firm is willing to produce in the short run if the price is at least equal to the average variable cost, and in the long run if the price is at least equal to the average total cost. ⚹◊What impact do short-run and long-run production decisions have on a firm's costs in the context of economics?⍭ Generate me a similar question◊

Question

Which of the following best describes what is true for a firm to be willing to produce in both the short run and the long run?

Choose 1 answer:
(A) $P \geq A V C$ in the short run; $P \leq A T C$ in the long run.
(B) $P=A V C$ in the short run; $P<A T C$ in the long run
(C) $P \geq A V C$ in the short run; $P \geq A T C$ in the long run.
(D) $P<A V C$ in the short run; $P \geq A T C$ in the long run
(E) $P<A V C$ in the short run; $P \leq A T C$ in the long run

Accepted Answer

∻Solution∻ ‖ a ⋮ Short Run Production Decision: In the short run, a firm will be willing to produce as long as the price (P) it receives for its product is greater than or equal to the average variable cost (AVC). If P is less than AVC, the firm would not cover its variable costs and would minimize its losses by shutting down production. ‖ ‖ b ⋮ Long Run Production Decision: In the long run, a firm will be willing to produce if the price (P) it receives is greater than or equal to the average total cost (ATC). This is because, in the long run, all costs are variable and a firm must cover both variable and fixed costs to remain in business. If P is less than ATC, the firm would not be able to cover all its costs and would exit the industry. ‖ ∻Answer∻ ⚹ (C) $P \geq AVC$ in the short run; $P \geq ATC$ in the long run. ⚹ ∻Key Concept∻ ⚹ Firm's Willingness to Produce ⚹ ∻Explanation∻ ⚹ A firm is willing to produce in the short run if the price is at least equal to the average variable cost, and in the long run if the price is at least equal to the average total cost. ⚹◊What impact do short-run and long-run production decisions have on a firm's costs in the context of economics?⍭ Generate me a similar question◊

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