Post Utme Joseph Ayo Babalola University 2020 Commerce Question 6

Practice objective / multiple choice question 6 from the 2020 Post Utme Joseph Ayo Babalola University Commerce examination.

Post Utme Joseph Ayo Babalola University 2020 Commerce Objective / Multiple Choice
Question 6 POST_UTME_JOSEPH_AYO_BABALOLA_UNIVERSITY • 2020 • COMMERCE • objective

In a perfectly competitive market, the supply curve is determined by the marginal cost (MC) of production. If the MC curve intersects the average variable cost (AVC) curve at point E, and the MC curve intersects the average total cost (ATC) curve at point F, what is the likely outcome for the firm?

Answer Options

A. The firm will shut down because the AVC is greater than the price.
Correct Answer B. The firm will operate at point E because the AVC is less than the price.
C. The firm will operate at point F because the ATC is less than the price.
D. The firm will operate at point E because the MC is less than the price.
Correct Answer
B
Correct Option:
The firm will operate at point E because the AVC is less than the price.

About This Question

This is Post Utme Joseph Ayo Babalola University 2020 Commerce Question 6. It is one of the objective questions from the 2020 Post Utme Joseph Ayo Babalola University Commerce examination.

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