In the short run, a profit-maximizing firm in a price-taker market will definitely stop production if
a. economic profit is zero.
b. price falls below average total cost.
c. price is less than average variable cost.
d. it cannot completely cover its fixed costs.
C
You might also like to view...
When a person's income decreases, the slope of the individual's budget constraint stays the same because:
A. everything is relatively more expensive now. B. everything is relatively less expensive now. C. the relative prices of the goods haven't changed. D. the prices of the goods change in the same proportion.
An oligopoly with two firms is known as:
A. a duopoly. B. a two-opoly. C. a double market. D. duopolistic competition.
In the oil tanker industry, large companies have lower risk and are able to optimize vessel utilization. If consolidation allows companies to lower their long-run average total costs, this is an example of:
a. the opportunity costs of mergers. b. the increase in utility of managers by being able to control larger companies. c. the dangers of oil tankers to the environment. d. the economies of scale in the oil tanker industry. e. the law of diminishing returns.
The price of gold is $300 per ounce in New York and 435 Canadian dollars per ounce in Toronto, Canada. If the law of one price holds for gold, the nominal exchange rate is ________ Canadian dollars per U.S. dollar.
A. 1 B. 1.45 C. 0.690 D. 0.333