In the short run, a purely competitive firm will earn a normal profit when:
A. P = AVC.
B. P > MC.
C. that firm's MR = market equilibrium price.
D. P = ATC.
Answer: D
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Suppose a student is attending your college on an athletic scholarship, and doesn't pay a penny for tuition. According to the economic way of thinking, the student's cost of attending college is
A) zero. B) bore completely by the college's athletic fund. C) positive, because the student sacrificed some other opportunity to attend your college. D) positive, because the student still needs food and housing. E) negative, because nobody really gains by trying to combine athletics with higher education.
If the money supply is $200 million, the reserve requirement is 20%, and currency holding $10 million, then reserves are
a. $10 million. b. $40 million. c. $30 million. d. $40 million. e. none of the above
Employers verify the facts of potential employees' resumes to avoid
A) signaling. B) screening. C) cheap talk. D) moral hazard.
A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. What is the present value of the cash flows from the investment?
a. $1100 b. $541 c. $600 d. $1041