A company finds that at its present level of production, MR = MC at $14, MC = AVC at $15, and MC = ATC at $20. Your advice to the firm regarding its short-run operations is
A) to continue production, as it is earning an economic profit of $1 per unit.
B) to continue production, as it is earning an economic profit of $6 per unit.
C) to shut down.
D) to continue production at a loss.
Answer: C
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Which of the following statements is true?
A) Countries with lower investment in research and development (R&D) are likely to have higher standards of living. B) The Industrial Revolution started in the United States and spread to other parts of the world. C) The Industrial Revolution started in South America and spread to other parts of the world. D) Countries with a higher investment in research and development (R&D) are likely to have higher standards of living.
In the long-run, if firms in a perfectly competitive market are incurring persistent economic losses, some firms will
A) exit and the price will fall. B) exit and the price will rise. C) enter and the price might either rise or fall. D) exit and the price might either rise or fall.
An example of a seasonally unemployed worker would be
A) a day care provider who quits his job to go back to school. B) a mother who quits her job to stay home with her children. C) a General Motors employee loses her job because the company is downsizing its work force. D) a software engineer who is laid off because of declining demand for the software he writes. E) a ski lift operator who loses his job when the snow melts in the spring.
Considering the concept of compounding, explain why in determining the future value of a $100 investment at 5 percent annual interest, you can't simply multiply $100 by (1.10) and get the correct answer.
What will be an ideal response?