If a firm makes negative short run profits, it will exit the industry in the long run.
Answer the following statement true (T) or false (F)
False
Rationale: It may be that the firm simply has way too little capital -- and, when given a chance to hire more capital, it can lower its costs such that short run and long run profits will be non-negative.
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Explain how an increased federal budget deficit resulting from a recession can actually help stabilize an economy
What will be an ideal response?
In the short run, if the Fed wants to raise the federal funds rate, it
A) instructs large commercial banks to sell government securities in the open market. B) instructs the New York Fed to buy government securities in the open market. C) instructs the New York Fed to sell government securities in the foreign exchange market. D) instructs the New York Fed to sell government securities in the open market. E) tells large commercial banks to raise their interest rates.
Unlike a sole proprietorship, a corporation's shareholders
A) own the firm and directly manage it as well. B) do not own the firm but directly manage it. C) own the firm but do not directly manage it. D) do not own the firm and do not directly manage it.
Refer to Figure 19.2. The total utility of five apples is
A. 20 utils. B. 1 utils. C. 17 utils. D. 18 utils.