The figure above shows Mollie's Mugs' costs of producing mugs. The mug market is perfectly competitive
If the market price of a mug falls to $5 and Mollie's shuts down temporarily, its total variable cost is ________ an hour and it incurs an economic loss of ________ an hour. A) $160; $280
B) $8; $14
C) $0; $120
D) $0; $6
C
You might also like to view...
Is it possible for a super-entrepreneur to solve all of the coordination failure problems within a developing economy? Discuss
What will be an ideal response?
The demand for gold increases, other things equal, when
A) the market for silver becomes more liquid. B) interest rates are expected to rise. C) interest rates are expected to fall. D) real estate prices are expected to increase.
Asymmetric information often makes it difficult to tell good from bad. This is a problem of
A) moral hazard. B) negative externalities. C) adverse selection. D) moral hazard and not adverse selection.
Myron worked at a factory where he earned $20,000 per year. He quit his job and opened a bumper sticker business. After one year, his business earned $60,000 in sales revenue and he incurred $30,000 in direct business expenses. If he received no salary from the new business, what is his accounting profit?
a. $10,000 b. $20,000 c. $40,000 d. $30,000 e. $60,000