A grocery store should close at night if the ?
Correct answer: C. variable costs of staying open are greater than the total revenue due to staying open
- A. variable costs of staying open are less than the total revenue due to staying open.
- B. total costs of staying open are less than the total revenue due to staying open
- C. variable costs of staying open are greater than the total revenue due to staying open
- D. total costs of staying open are greater than the total revenue due to staying open
Explanation
The store should close temporarily when the revenue from remaining open is less than its variable costs, as staying open would add to its loss. Fixed costs must be paid even during the closure and therefore do not determine the short-run shutdown decision.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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