What is the shutdown point?
What will be an ideal response?
The shutdown point is the lowest point on the average variable cost curve.
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You agree to lend $1,000 for one year at a nominal interest rate of 10%. You anticipate that inflation will be 4% over that year. If inflation is instead 3% over that year, which of the following is true?
A) The person who borrowed the $1,000 will be worse off as a result of the unanticipated decrease in inflation. B) The real interest rate you earn on your money will be negative. C) The purchasing power of the money that will be repaid to you will be lower than you expected. D) The real interest rate you earn on your money is lower than you expected.
Technological innovation in the production of computers has led to
A) a decrease in the quantity demanded for computers. B) a rightward shift of the supply curve for computers. C) a decrease in the quantity supplied of computers. D) None of the above.
Since the mid-1980s, the debt-to-income ratio of American households
a. has remained about the same as the previous 25 years. b. has been slowly declining. c. has fluctuated between about 55 and 70 percent of after-tax income. d. has rapidly increased.
Which of the following goods is NOT subject to the free-rider problem?
A) a public park B) the local police force C) public fireworks D) a mass transit system