If a graph of a perfectly competitive firm shows that the MR = MC point occurs where MR is above AVC but below ATC,
A) the firm is earning negative profit, and will shut down rather than produce that level of output.
B) the firm is earning negative profit, but will continue to produce where MR = MC in the short run.
C) the firm is still earning positive profit, as long as variable costs are covered.
D) the firm is covering explicit, but not implicit, costs.
E) the firm can cover all of fixed costs but only a portion of variable costs.
B
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If price fixing by competitors is necessary because without it a firm will go bankrupt, is the price fixing legal?
What will be an ideal response?
According to the contract theory of wages, firms and workers agree on a contract that fixes
a. money wages. b. real wages. c. money wages and employment. d. real wages and employment.
Primary credit extended by the Fed is:
A. the highest interest rate loans offered by the Fed. B. loans offered at the prime interest rate for periods exceeding thirty days but less than one year. C. for banks needing long-term loans to work out financial problems. D. short-term, usually overnight loans.
List the two main functions performed by the Fed?