Economics 9708 · AS & A Level · 7.5

7.5 — practice question

Why may a firm keep producing in the short run even though the price of its product has fallen below its average total production costs?

  • AIt anticipates a rise in variable costs.
  • BIt expects the fall in price to be temporary.
  • CIt has large fixed costs of production.
  • DIt has no control over the price of its product.

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