Suppose that at the current level of output, price = $100, MC = $100, AVC = $80, and ATC = $90. Which of the following is TRUE?
A) The firm should decrease output.
B) The firm should shut down.
C) The firm should increase output.
D) The firm should maintain the current level of output.
D
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Suppose the price elasticity of demand for oil is 0.1. In order to lower the price of oil by 20 percent, the quantity of oil supplied must be increased by
A) 200 percent. B) 20 percent. C) 2 percent. D) 0.2 percent.
Between 1994 and 2000 the poverty rate ____ and the number of people on welfare ______.
A. declined; declined B. rose; rose C. rose; declined D. declined; rose
When a perfectly competitive market is in long-run equilibrium, price is equal to marginal cost, the individual firm is operating at the minimum of its short-run and long-run average cost curves, and economic profit equals zero
Indicate whether the statement is true or false
What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?
a. Price would fall, and the effect on quantity would be ambiguous. b. Price would rise, and the effect on quantity would be ambiguous. c. Quantity would fall, and the effect on price would be ambiguous. d. Quantity would rise, and the effect on price would be ambiguous.