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MMLU / Which of the following is true of a profitmaximizing firm in the short run?

Problem

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question

Which of the following is true of a profitmaximizing firm in the short run?

choices

  1. The firm will shut down to minimize losses if product price falls below average total cost.
  2. The firm will shut down if marginal revenue equals marginal cost but exceeds average variable cost.
  3. The firm will continue to produce as long as total revenue exceeds total variable cost, even if it incurs loss.
  4. The firm will continue to produce as long as average variable cost is less than average fixed cost.

subject

miscellaneous

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