Suppose a firm in a perfectly competitive market is operating at its profit-maximizing level of output. Will the firm suspend operations if it faces a reduction in the price it can charge for its product?
a. No, because it can always raise its prices in the short run.
b. No, because it can always raise its prices in the long run.
c. No, as long as the firm earns sufficient revenue to pay all of the variable costs.
d. Yes, since it never makes sense to operate at a loss, even in the short run.
e. No, because it always makes sense to operate at a loss, even in the long run.
c
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Suppose an MNC subsidiary buys 100 input units from its parent at a price of $2 each. It has $300 in additional production costs, and sells its 100 units of output for $6 to the MNC. It pays a 25% local profit tax
The MNC sells the output at home for $8, and its cost of producing inputs is $1 . It pays a profit tax of 20% at home on repatriated profits. What is the subsidiary net profit? Assume no selling costs at home. What is the MNC's total profit from the operation?
Pain, suffering and disfigurement are forms of
a. compensatory damages b. punitive damages c. economic damages d. all of the above.
When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. eventually production will decrease. B. eventually production will increase. C. there will be no change in aggregate production. D. the government will intervene by cutting down on taxes.
Why is the demand curve for a monopolist downward sloping? How does this affect the monopolist’s behavior?
What will be an ideal response?