In the short run, when the prevailing market price falls below the average variable cost curve, a firm in perfect competition will shut down because:
a. economic profit is zero
b. price is less than marginal revenue.
c. marginal revenue is insufficient to pay average variable cost.
d. other firms will enter the market seeking profits.
c
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Doctor Hugh R. Sick recommends his patient take 2 units of insulin per day to successfully manage her diabetes condition. In a different office across town, Doctor I. M
Dismal, an economics professor, tells his student to read every assigned textbook chapter to successfully pass economics. In spite of the sage advice of the doctor and professor, the economic way of thinking recognizes A) patients don't always follow their doctor's orders. B) students don't always follow their professor's pleas. C) substitutes for prescriptions and textbook assignments exist; patients and students demonstrate their desire for substitutes through their actions. D) all of the above are true.
If U.S. net exports are negative,
a. U.S. consumers are spending less on foreign goods than foreign consumers are spending on U.S. goods b. U.S. consumers are spending more on foreign goods than foreign consumers are spending on U.S. goods c. the government must promote imports to balance international trade d. U.S. consumers are spending more on foreign goods than they are spending on U.S. goods e. U.S. disposable income is low
An economist left her $100,000-a-year teaching position to work fulltime in her own consulting business. In the first year, she had total revenue of $200,000 and business expenses of $150,000 . She made a (an):
a. economic profit. b. accounting loss but not an economic loss. c. implicit profit. d. economic loss.
Explain why a perfectly competitive firm has no incentive to charge a higher or lower price than the market price.
What will be an ideal response?