If a firm is producing its output where MR=MC, but is suffering (economic) losses, then it...

If a firm is producing its output where MR=MC, but is suffering (economic) losses, then it must be the case that

a) price is less than average total cost.

b) price exceeds marginal cost.

c) price is less than average variable cost.

d) price equals marginal revenue.

Solutions

Expert Solution

Ans) the correct option is a) price is less than average total cost.

When average total cost exceeds price, the firm incurs losses

Rahul Sunny answered 1 year ago

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