A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; margin
26.A firm operates in a
A-Average total cost = price; marginal cost > marginal revenue.
B-Average total cost = price; marginal cost = marginal revenue
C-Average total cost > price; marginal cost = marginal revenue
D-Average total cost > price; marginal cost > marginal revenue
E-Average total cost < price; marginal cost > marginal revenue
27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case?
A-The market price was less than the firm's average variable cost.
B-The firm was earning normal profits in the short run but projected economic losses in the long run.
C-The firm's average total cost was higher than its average revenue.
D-The market price was between the firm's average variable cost and average total cost.
E-The market price was equal to the firm's average total cost.
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