If a firm in a perfectly competitive market is currently producing the output where price = marginal cost > average total cost, the firm is:
A. earning a positive profit.
B. earning a zero profit.
C. suffering an economic loss.
D. All of these
Answer: A
You might also like to view...
People acting in their own self interest is the basis of the
A) principle of voluntary exchange. B) principle of scarcity. C) real-nominal principle. D) principle of supply and demand.
An increase in resources, efficiency, or technology will shift the:
A) short-run aggregate supply curve rightward. B) short-run aggregate supply curve leftward. C) long-run aggregate supply curve rightward. D) long-run aggregate supply curve leftward.
One way for firms to analyze their choices in an oligopoly is by using:
A. game theory. B. cost minimization theory. C. marginal revenue maximization strategy. D. None of these is an effective method for oligopolists.
Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?
a. An upward movement along the demand curve for tomato juice. b. A downward movement along the demand curve for tomato juice. c. A rightward shift in the demand curve for tomato juice. d. A leftward shift in the demand curve for tomato juice.