The above figure shows a perfectly competitive firm. If the market price is $10, the firm
A) is incurring an economic loss.
B) is making an economic profit.
C) is making zero economic profit.
D) will immediately shut down.
E) might shut down but more information is needed about the AVC.
C
You might also like to view...
Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that: a. consumers are buying more corn than before
b. corn is relatively more abundant than before. c. corn is relatively less abundant than before. d. consumers are stocking up on corn because of the predictions of a cold winter.
Taxes paid divided by total income is the
A. Marginal tax rate. B. Nominal tax rate. C. Horizontal tax rate. D. Effective tax rate.
The balance of trade measures the:
A. difference between the value of imports and that of exports. B. exchange rate needed to make imports equal exports. C. share of U.S. exports going to various regions of the world. D. share of U.S. imports coming from various regions of the world.
A voluntary export restraint will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare
A) increase; decrease; increase; have an ambiguous effect on B) increase; decrease; decrease; decrease C) increase; decrease; have no effect on; have an ambiguous effect on D) increase; decrease; have no effect on; decrease E) increase; increase; decrease; have an ambiguous effect on