A perfectly competitive firm should continue to operate even at a loss in the short run if
A. it can cover its variable costs of production.
B. its revenues are less than its fixed costs.
C. it has some fixed costs that cannot be brought down to zero.
D. its output is above the break-even point.
Answer: A
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For a fixed resource like land to be allocated to its highest valued use
a. a good social plan is needed. b. it should be allocated to those who will pay the most. c. it should be taxed at 100 percent of its rental value. d. it should be offered to those who promise to put it to its best use.
Two goods are said to be substitutes when a fall in the price of one good:
A) leads to a left shift in the demand for the other good. B) leads to a rise in the price of the other good. C) doesn't affect the demand for the other good. D) leads to a right shift in the demand for the other good.
If the federal funds rate falls below the discount rate, banks will decrease their borrowings from __________ and __________ their borrowings from __________. It follows that when one bank borrows from __________, reserves in the banking system __________
A) other banks; increase; the Fed; another bank; remain unchanged B) the Fed; decrease; other banks; another bank; remain unchanged C) other banks; increase; the U.S. Treasury; the Treasury; increase D) the Fed; increase; other banks; another bank; remain unchanged E) none of the above
With productive efficiency:
a. There is production of that particular mix of goods and services most wanted by society b. The available supplies of factors of production are variable in quantity and quality c. There is production of any particular mix of goods and services in the least costly way d. The state of technology, or methods used to produce output, constantly change