Suppose that at the current level of output, Pat's Hats has fixed costs of $500, variable costs of $1,000 . and $2,000 in total revenue. Which of the following is true?
a. Profit is currently $500 and, in the long run, it will be $1,000 because there will be no fixed costs.
b. Profit is currently $500 and, in the long run, it will be $1,500 because there will be no variable costs.
c. Profit is currently $500.
d. Profit is currently $500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs.
e. Pat's Hats will continue to operate as long as revenue is greater than $500.
C
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The efficient level of paper production will occur where the
A) marginal private benefit from consuming paper is equal to the marginal social cost of production. B) marginal social benefit from consuming paper is equal to the marginal social cost of production. C) production of paper no longer produces negative externalities. D) economically efficient level of the output of paper is equal to the economically efficient level of inputs.
Gross domestic product (GDP) does not include:
a. used goods sold in the current time period. b. foreign produced goods. c. intermediate as well as final goods. d. None of these would be included.
Bubba is a shrimp fisherman who can catch 4,000 pounds of shrimp per year. Bubba is considering hiring his cousin Bobby to work for him. Bobby can catch 3,000 pounds of shrimp per year. If Bubba hires Bobby, what will be the total output of his shrimp business?
a. 7,000 pounds b. 3,500 pounds c. 3,000 pounds d. 1,000 pounds
If there is a recession, the Fed would most likely encourage banks to provide loans by:
A. buying government securities. B. raising the discount rate. C. selling government securities. D. raising the federal funds rate.