Refer to the graph shown. If the market price is $3, a perfectly competitive firm:
A. incurs a loss but can still cover its variable costs and some of its fixed costs.
B. earns a profit.
C. breaks even.
D. incurs a loss and cannot cover its variable costs.
Answer: D
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Comparing individuals taxes paid in one year with their incomes paid that year is likely to _____
a. overstate the progressive nature of the tax system b. overstate the regressive nature of the tax system c. understate the progressive nature of the tax system d. overstate the regressive nature of the tax system
According to a survey by the U.S. Bureau of Labor Statistics, which of the following statements about annual U.S. household consumer expenditures is false?
A) The income elasticity of demand for entertainment is positive. B) The income elasticity of demand for owner-occupied housing is positive. C) The income elasticity of demand for rental housing is positive. D) The income elasticity of demand for health care is positive. E) Average family expenditures increase with income.
If one dollar is initially equal in value to one euro and demand for euros increases, then each dollar will be worth
a. more than one euro, and European imports will be cheaper in the United States b. less than one euro, and European imports will be more expensive in the United States c. more than one euro, and European imports will be more expensive in the United States d. less than one euro, and European imports will be cheaper in the United States e. the same as the euro, and there will be no change in the values of imports or exports
From 2001 to 2004 the U.S. budget went from surplus to deficit. According to the open economy macroeconomic model, this change should have
a. increased U.S. interest rates and increased the real exchange rate of the dollar. b. increased U.S. interest rates and decreased the real exchange rate of the dollar. c. decreased U.S. interest rates and increased the real exchange rate of the dollar. d. decreased U.S. interest rates and decreased the real exchange rate of the dollar.