If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is
A) raise prices.
B) lower prices to gain revenue from extra volume.
C) shut down immediately, but not liquidate the business.
D) shut down immediately and liquidate the business.
E) continue operating, but plan to go out of business.
E
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Refer to A Negative Externality Problem. Absent any intervention, the competitive market will produce
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. 40 units. b. 45 units. c. 55 units. d. 60 units
The short-run effects of government's financial rescue program and fiscal stimulus package helped the economy increase aggregate demand curing the Great Recession
a. True b. False Indicate whether the statement is true or false
If the price elasticity of supply equals zero, this implies that:
A. suppliers can easily change the quantity supplied of the product as the price of the product changes. B. the period under consideration is a very long-run time period. C. the supply curve is perfectly vertical. D. the percentage change in quantity supplied equals the percentage change in product price.
Which of the following is a short-run adjustment?
A. A local bakery hires two additional bakers. B. Six new firms enter the plastics industry. C. The number of farms in the United States declines by 5 percent. D. BMW constructs a new assembly plant in South Carolina.