If price is above average variable cost and below average total cost, a profit-maximizing price taker should
a. immediately shut down; failing to do so is contrary to the idea of profit maximization in a competitive market.
b. continue producing as long as it expects the market price to rise above average total cost in the near future.
c. attempt to push price upward by slowly reducing output.
d. cut price so more units can be sold.
B
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Shaniq can spend the next hour studying for a finance test, hiking along the Oregon coast, watching reruns of Lost on television, or napping
If she decides to study, what is the opportunity cost of her choice: hiking, watching television, or napping?
All else equal, when a monopolist increases its price, revenue will fall because of the lost sales
a. True b. False
"Now that Blake paints the broad surfaces and I do the trim work, we can paint a house in three-fourths the time that it took for each of us to do both." This statement most clearly reflects
a. the importance of secondary effects. b. the fallacy of composition. c. the law of comparative advantage. d. behavior inconsistent with economizing.
The short-run Phillips curve is ________, while the long-run Phillips curve is vertical at the ________.
A. upward sloping; minimum wage B. downward sloping; real wage C. upward sloping; average nominal wage rate D. downward sloping; natural rate of unemployment E. horizontal; origin