In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below:
A. Marginal cost
B. Average cost
C. Average fixed cost
D. Average variable cost
D. Average variable cost
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Explain the elasticities and absorption approaches to the BOT. What is the most notable shortcoming of these approaches?
What will be an ideal response?
The payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing in new capital or not investing in new capital. 
Firm A's dominant strategy is to ________, and Firm B's dominant strategy is to ________.
A. not invest; invest B. not invest; not invest C. invest; invest D. invest; not invest
Based on the information in this graph showing the deadweight loss for rent controls in the short run, what would happen to the supply of rental units in ten days if a rent control were enacted today?
a. It would increase dramatically.
b. It would remain about the same.
c. It would decrease dramatically.
d. It would increase moderately.
Alma recently purchased a Mexican restaurant for $450,000 from which she expects to earn a monthly profit of $1,500. Her expected annual rate of return is:
A. 4 percent B. 6 percent C. 8 percent D. 10 percent