A firm is currently selling its output for $10 per unit and is producing where marginal revenue equals marginal cost at an output level of 100 units
If the firm's total variable costs are $900 and its fixed costs are $300 should it produce in the short run or shut down?
The firm should produce in the short run because its total revenue of $1000 ($10 x 100) is greater than its total variable cost of $900 .
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A shortage occurs when price is higher than the market equilibrium.
Answer the following statement true (T) or false (F)
Which of the following illustrates the concept of external benefit?
A) Good weather increases the size of the wheat crop. B) A new pesticide increases the size of the wheat crop. C) A gardener enjoys his flowers. D) Neighbors enjoy a gardener's flowers.
What does the sign (positive/negative) of the income elasticity tell us about a good?
What will be an ideal response?
Which of the following is not a supply-side policy to cure inflation?
A. Incentives to encourage saving. B. Reduced import barriers. C. Lower interest rates. D. Reduced marginal tax rates.