Chapter 8.4: Choosing Output in the Short Run

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5 Terms

1
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MC

MR = MC at a point at which the __ curve is rising

2
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Output Rule

If a firm is producing any output, it should produce at the level at which MR = MC.

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less than

The firm is losing money when its price is __ ATC at the profit-maximizing output q*

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shuts down

Fixed costs do not change with the level of output, but they can be eliminated if the firm __.

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in the short run

The firm might operate at a loss ___ because it expects to become profitable again in the future, when the price of its product increases or the cost of production falls.