The above figure shows the short run cost curves for a typical firm in a competitive market. If price = 8, then the firm
A) is earning positive profits.
B) should produce 50 units.
C) should shut down.
D) None of above.
B
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In the kinked demand curve model, if one firm reduces its price
A) other firms will also reduce their price. B) other firms will compete on a non-price basis. C) other firms will raise their price. D) Both A and B are correct. E) Both B and C are correct.
A tax is said to be progressive if
a. the absolute size of the tax (in dollars) increases as income increases b. the wealthy pay a smaller percentage of their income than the poor c. the average tax rate falls as income rises d. the proportion of income paid as taxes increases as income increases e. the proceeds are used to pay for liberal political programs
A risky borrower can pay a lower interest rate if:
a. she invests the amount in a profitable business. b. she can assure the lender of a low inflation rate. c. she makes a promise to repay within a short interval. d. she can arrange for a collateral.
Refer to the accompanying figure. Assume the market is originally at point W. Movement to point Z is a combination of:
A. an increase in supply and an increase in quantity demanded. B. a decrease in supply and an increase in quantity demanded. C. an increase in demand and an increase in quantity supplied. D. an increase in supply and an increase in demand.