If price is less than average variable cost at a level of output where marginal revenue is equal to marginal cost, then in the short run the firm:
A. should shut down.
B. should produce the level of output where marginal revenue equals marginal cost.
C. should gather more data to determine whether to shut down.
D. will produce only if they can decrease their fixed costs.
Answer: A
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In the economic way of thinking, a rise in the real output of final goods and services can be associated with
A) a fall in the price level. B) a rise in nominal GDP. C) a rise in the price level. D) a fall in nominal GDP. E) any of the above.
A tariff is a
A) tax on an exported good or service. B) tax on an imported good or service. C) subsidy on an exported good. D) subsidy on an imported good.
Using historical statistics is likely to produce accurate estimates of demand curves since such studies have large amounts of data to draw on.
Answer the following statement true (T) or false (F)
Why were there so few strikes from 1942-1945?
A. Unions were too weak to strike. B. Union members were afraid that their employers would move their factories to other countries. C. It was considered unpatriotic to strike while we were at full-scale war. D. Labor leaders were afraid that strikes would force financially weak employers out of business.