If a firm in a perfectly competitive industry experiences persistent losses, in the long run it should
A) shut down temporarily and wait for market conditions to change.
B) continue to operate if it can raise the demand for its product through advertising and quality improvements.
C) exit the industry.
D) raise its price to cover average total cost.
C
You might also like to view...
All of the following make the use of fiscal policy less attractive EXCEPT
A) expansionary fiscal policy tends to cause inflation and offsets some of the increased consumer spending. B) that it cannot be effective, unless it is accommodated with expansionary monetary policy. C) the substantial margin of error in the value of the multiplier. D) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure. E) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
When a country's nominal exchange rate depreciates, the price of
A) that country's goods abroad increases. B) that country's goods abroad decreases. C) foreign goods sold in the country decreases. D) that country's goods produced and sold at home decreases.
If the total utility Jack receives from 10 gallons of gasoline is 16, and the total utility Jack receives from 11 gallons of gasoline is 20, the marginal utility of the 11th gallon of gasoline is
a. 1 b. 4 c. 7 d. 20 e. 21
Answer the following statements true (T) or false (F)
1. Only in developing nations would one expect the value of either exports or imports to exceed 200 percent of gross national product. 2. In dollar value, the United States is the largest importer in the world. 3. The value of U.S. exports is about 10 percent of its GDP. 4. Although political arguments strongly favor free trade, most decisions affecting international trade are made in the economic arena. 5. The only factor determining whether a country can develop a comparative advantage in production is the degree to which it has a highly skilled labor force.