Why are losses acceptable in the short run but not the long run?
What will be an ideal response?
Losses are acceptable in the short run because even if it is not possible to make a normal or economic profit the goal is to minimize losses. In the short run this would happen when the price is below average total cost but still above average variable cost. In the long run the goal is to make at least normal economic profit. Since this is the minimum that one would expect to earn in the long run losses are not acceptable.
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Suppose s = 0.18, Y = 4000, K = 6200, n = 0.02, and d = 0.08. This makes national saving ________ than steady-state investment, so that the amount of capital per worker is ________
A) greater, rising B) greater, falling C) less, rising D) less, falling
According to the principle of comparative advantage, total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?
A. Opportunity costs are lowest. B. Absolute advantages are highest. C. Opportunity costs are equal. D. Absolute advantages are lowest.
cost-push inflation spiral results if the Fed's response to stagflation is to keep
What will be an ideal response?
An industry with a horizontal long-run supply curve is called a(n) ________ industry.
A. decreasing-profit B. constant-cost C. decreasing-cost D. increasing-cost