Exhibit 8-16 Short-run cost curves for a competitive firm
In Exhibit 8-16, if the market price of its product is $50 per unit, then the firm will:
A. break even.
B. shut down.
C. exit the industry.
D. earn a positive economic profit.
Answer: A
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In an indifference curve/budget line diagram, at your consumer equilibrium, that is, your best affordable point, which of the following statements is CORRECT?
A) Any movement upward or downward on your budget line will move you to a less preferred point. B) Any movement upward or downward on your indifference curve will move you to a less preferred point. C) Your marginal rate of substitution is greater than the magnitude of the budget line by as much as possible. D) All of the above are correct.
A merger between firms in which one firm purchases an input from the other is called a
A) conglomerate merger. B) horizontal merger. C) vertical merger. D) none of the above.
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A decrease in the reserve requirement ________ bank reserves and ________ the money supply
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases