Under what conditions should a competitive firm shut down in the short run?
What will be an ideal response?
When market price is below average variable cost at the output where marginal revenue equals marginal cost, the firm should shut down in the short run.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
From the economic point of view, "joint costs" are problematic because
A) they can only be determined in markets for illicit drugs. B) there is no way to correctly allocate joint costs. C) they can be measured only by the most sophisticated accounting techniques. D) there is no way to discuss the concept meaningfully.
Per pupil spending on education was seven times higher in 2000 than in 1940 after adjusting for inflation
a. True b. False
Developing countries typically have poorly developed property rights and less social capital designed to promote trust and cooperation in the economy
Indicate whether the statement is true or false