Question 11 A firm that is suffering an economic loss in the short run should continue to operate as long as price is greater than Group of answer choices average fixed cost. average variable cost. average total cost. marginal cost.

Question 11 A firm that is suffering an economic loss in the short run should continue to operate as long as price is greater than Group of answer choices average fixed cost. average variable cost. average total cost. marginal cost.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter22: Getting Divisions To Work In The Firm’s Best Interests

Section: Chapter Questions

Problem 3MC

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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

Question 11

A firm that is suffering an economic loss in the short run should continue to operate as long as price is greater than

Group of answer choices

average fixed cost.

average variable cost.

average total cost.

marginal cost.

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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