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Why Would a Firm Decide to Produce a Positive Quantity

Question 40

Multiple Choice

Why would a firm decide to produce a positive quantity of a output even though it makes negative profits by doing so?


A) Because the price is high enough to cover the average fixed cost.
B) Because the price is high enough to cover the average variable cost.
C) Because the price is high enough to cover the average total cost.
D) A firm would never produce when profit is negative.

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