If there is no output for which product price is sufficient to cover variable costs
A. the firm earns economic profits by staying open.
B. the firm should increase production.
C. the firm should stay open in the short-run.
D. the firm should shut down in the short run.
Answer: D
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When the economy is in the liquidity trap,
A) velocity is constant. B) monetary policy is impotent. C) fiscal policy is impotent. D) income is zero
The interest rate on interbank loans is called the
A) discount rate. B) federal funds rate. C) repo rate. D) prime rate.
According to the graph shown, if this economy were to open to trade, domestic producers would:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. transfer surplus in area DE to consumers.
B. transfer surplus in area DE to foreign producers.
C. lose surplus in area FG to deadweight loss.
D. lose surplus in area FG to foreign producers.
Exhibit 11-12 A monopsonist
In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:
A. the MRP curve slopes down. B. the market supply of labor curve is horizontal. C. the MFC curve lies above the supply of labor curve. D. the MRP curve lies below the supply of labor curve.