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Suppose a Price-Taking Firm Produces 400 Units at Its Optimal

Question 94

Multiple Choice

Suppose a price-taking firm produces 400 units at its optimal output level.At that output rate,marginal cost is $200,average total cost is $240,and average variable cost is $170.The firm will be forced to go out of business in the short run if _____


A) the market price equals $200 per unit.
B) the market price is between $170 per unit and $240 per unit.
C) the market price falls below $170 per unit.
D) the market price is between $200 per unit and $240 per unit.
E) the market price equals $240 per unit.

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