Suppose Blu-ray discs are sold in a perfectly competitive market. The current market price of Blu-ray discs is $15. If at the current level of production of compact discs you calculate the marginal cost to your company is also $15, and that AVC is rising, in the short run your company should:
A. produce more Blu-ray discs.
B. produce fewer Blu-ray discs.
C. continue producing the current level of Blu-ray discs.
D. raise the price of its Blu-ray discs.
Answer: C
You might also like to view...
If firms receive an economic forecast predicting future increases in the growth of real GDP, they are likely to respond by
A) increasing their level of investment spending to increase future production capacity. B) decreasing their level of investment spending to decrease current production capacity. C) increasing their level of investment spending to increase current production capacity. D) decreasing their level of investment spending to decrease future production capacity.
National banks are chartered by the
A) Office of the Comptroller of the Currency. B) Office of Bank Supervision. C) Securities and Exchange Commission. D) Office of Management and the Budget.
People who call for creating a "level playing field" believe that:
a. a country with relatively low wages is typically a country with an abundance of low-skilled labor. b. trading on the basis of comparative advantage benefits both domestic and foreign firms. c. creating a "level playing field" undermines the basis for specialization and economic efficiency. d. production in accordance with comparative advantage is unfair. e. free trade allocates the scarce resources in an efficient way.
If taxes rise $100 billion, disposable income will fall by $100 billion and consumption spending will also fall by $100 billion
a. True b. False