Identify the factors that a firm must consider before shutting down an unprofitable business
What will be an ideal response?
There are times when keeping a money-losing factory open is the best choice. The firm should keep the factory open if the total revenue from the goods the factory produces is greater than the cost of keeping it open. the benefit of operating the facility is greater than the variable cost, so it makes sense to keep the facility running.
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The law of demand refers to how
A) demand changes when people's incomes change. B) demand changes when the prices of substitutes and complements change. C) the quantity demanded changes when the price of the good changes. D) the price of the good changes when people's demand for the good changes. E) the quantity demanded changes when the demand for the good changes.
The table above shows sales of the firms in the chocolate industry. What type of market is this?
A) perfect competition B) monopolistic competition C) oligopoly D) monopoly
Suppose you plan on eating 50 potato chips. As you start consuming potato chips, your marginal utility is very high, but it begins to fall slowly until you’ve eaten 10 chips. After you have eaten 10 chips, your marginal utility decreases even faster with each additional chip. Marginal utility continues to decline until you’ve eaten 49 chips. The fiftieth chip does not give you any additional utility. After 50 chips, your mouth gets so salty that it is unpleasant to eat any more, so marginal utility is actually negative for those chips. How many chips should you eat in order to maximize your total utility?
a. 1 b. 10 c. 49 d. 51
You win your state lottery. The lottery officials offer you the option of taking your winnings in one lump-sum payment, or fixed annual payments for the next 20 years. The sum of the 20 annual payments is larger than the lump-sum payment. Before deciding, what are the key factors you will want to consider that could influence your decision?
What will be an ideal response?