Refer to Table 11-7. What is the average total cost of production when the firm produces 120 lanterns?
A) $1,680 B) $72 C) $14 D) $12.3
C
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The problem of moral hazard arises because _____
a. individuals receive insurance through their employer, who has different incentives b. individuals with insurance have no incentive to avoid insured expenditures c. some individuals have religious objections to purchasing insurance d. some individuals are immoral
If production is subject to economies of scale,
a. countries can gain from trade if each nation specializes b. one country will develop an absolute advantage in the production of all goods c. higher output levels result in higher average production costs d. one country will develop a comparative advantage in the production of all goods e. countries cannot gain from trade
Susan quit her job as a teacher, which paid her $36,000 per year, in order to start her own catering business. She spent $12,000 of her savings, which had been earning 10 percent interest per year, on equipment for her business. She also borrowed $12,000 from her bank at 10 percent interest, which she also spent on equipment. For the past several months she has spent $1,000 per month on
ingredients and other variable costs. Also for the past several months she has taken in $3,500 in monthly revenue. In the short run, Susan should a. shut down her business, and in the long run she should exit the industry. b. continue to operate her business, but in the long run she should exit the industry. c. continue to operate her business, but in the long run she will probably face competition from newly entering firms. d. continue to operate her business, and she is also in long-run equilibrium.
Entry leads to higher prices and profits in an industry.
Answer the following statement true (T) or false (F)