What does it mean for a firm to be suffering an economic loss? Does this imply that the firm is earning negative profit in the accounting sense? Explain
What will be an ideal response?
When a firm is suffering an economic loss, it is earning a below-normal rate of return. However, this does not imply that the firm is earning negative profit in an accounting sense. It is possible that the opportunity costs of owner-supplied factors of production are greater than the firm's accounting profit.
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A new U.S. tariff on imported steel would be likely to: a. raise the cost of production to steel-using American firms. b. generate tax revenue to the government
c. increase U.S. production of steel. d. all of the above
If consumers receive an increase in income of $1,000 . their spending will increase by a smaller amount
a. True b. False Indicate whether the statement is true or false
Given the industry supply and demand shown on the right side of the below graph, use the left side of the figure to draw the perfect competitor's demand, marginal revenue, average total cost, and marginal cost curves for its long-run situation.
Which of the following statements with respect to the monopolist is FALSE?
A) A monopolist can make higher profits if it can price discriminate. B) A monopoly tends to result in a lower quantity being sold than perfect competition does. C) Monopoly is a situation in which a single firm dominates. D) A monopoly arises in a situation with few barriers to entry into the marketplace.