Suppose that at the current level of output, price = $12, MC = $4, AVC = $7, and ATC = $11. 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.
Answer: C
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Refer to Figure 22-1. Diminishing marginal returns is illustrated in the per-worker production function in the figure above by a movement from
A) C to D. B) D to C. C) B to C. D) A to C.
Regressive tax systems are bad.
A. True B. False C. Uncertain
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.
An economy in which a central authority draws up a plan that establishes what will be produced and when, sets production goals, and makes rules for distribution is a
A. free-market economy. B. command economy. C. laissez-faire economy. D. public-goods economy.