In the short run, if a firm is suffering a loss, it should

a. always shut down to prevent further losses.
b. continue to operate as long as it can recover variable cost.
c. continue to operate as long as it can recover fixed cost.
d. continue to operate if marginal cost is below average total cost.


b. continue to operate as long as it can recover variable cost.

Economics

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Refer to Figure 10.1. The minimum feasible price is ________

A) P1 B) P2 C) P3 D) P4 E) none of the above

Economics

An unexpected increase in the supply of money will

a. reduce the real rate of interest and, thereby, trigger an increase in current spending by households and businesses. b. reduce aggregate demand and real output in the short run. c. increase only the general level of prices in the short run. d. lead to a higher rate of unemployment in the short run.

Economics

The Federal Reserve is:

A. the United States' central bank. B. a Congressional committee. C. another name for the U.S. Treasury. D. the largest commercial bank in the U.S.

Economics

A theory of fairness that holds that taxpayers should contribute to the government in ________ the benefits they receive from public expenditures is the benefits-received principle.

A. proportion to B. a greater proportion than C. a smaller proportion than D. The benefits-received principle does not equate taxpayer contributions to the government and benefits received from public expenditure.

Economics