Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $16 . What do you advise this firm to do?
a. Increase output.
b. Decrease output.
c. Shut down operations.
d. Stay at the current output; the firm is earning a profit of $400.
e. Stay at the current output; the firm is losing $200.
d
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According to this Application, a common belief is that fiscal multipliers are ________ during ________
A) larger; recessions B) of equal size; recessions and growth periods C) smaller; growth periods D) smaller; recessions
If firms in monopolistic competition are earning short-run profits,
a. barriers to entry will allow the profits to continue in the long run. b. total supply in the market will decrease in the long run as firms reduce output to keep prices high. c. the entry of new firms will eliminate the profits in the long run. d. each existing firm will experience an increase in its average revenues in the long run.
If a profit-maximizing firm's fixed cost of producing widgets falls,
a. its total cost curve is unaffected. b. its marginal cost curve shifts down. c. the firm will produce more widgets. d. the firm's average profit per widget produced rises.
Which of the following is a difference between stocks and bonds?
A. Stocks are issued for a fixed period; bonds are not. B. Stocks pay interest; bonds pay dividends. C. Bond payouts are more predictable than payouts from stocks. D. Bonds represent ownership; stocks represent debt.