A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000. The prevailing market price is $48
Assuming that this firm continues to produce in the long run, what happens to output level in the long run?
A) The firm produces the same output level.
B) The firm's output increases.
C) The firm's output falls.
D) There is insufficient information to answer the question.
B
You might also like to view...
If the firm in the figure above attempted to minimize its average total cost by producing 100 pairs of Tommy jeans per day at an average total cost of $20 per pair and it sold those jeans for $80 per pair, the firm would ________
A) earn zero economic profit B) earn a larger economic profit that a firm that produced 125 jeans because the ATC of producing 125 jeans is higher than the ATC of producing 100 jeans C) incur an economic loss D) earn a smaller economic profit than a firm that produced 125 jeans E) achieve an efficient use of resources
Consider the two economies of Lithasia and Barylia. Economic agents in Lithasia have coordination and incentive problems, while in Barylia social surplus is maximized
Which economic system does each of these economies most likely have? Explain your answer.
Since the government controls the maximum price pipelines can charge for transportation of natural gas, the pipelines going to the same destination usually compete by discounting rates below the legal maximum
Indicate whether the statement is true or false
The Fed would engage in ____ it wanted to address an inflationary gap
a. expansionary monetary policy b. contractionary monetary policy c. contractionary fiscal policy d. expansionary fiscal policy