A monopolistically competitive firm is operating at a short-run level of output where price is $30, average total cost is $35, average variable cost is $25, marginal cost is $15, and marginal revenue is $12. In the short run this firm should:
A. decrease the level of output.
B. shut down.
C. make no change in the level of output.
D. increase the level of output.
Answer: A
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In the short run, if a firm's total variable cost curve lies above its total revenue curve at all possible output levels, the firm's minimum short-run loss
a. equals its total fixed cost b. equals zero c. occurs at the maximum point of the total revenue curve d. occurs at the maximum point of its marginal revenue curve e. occurs at the minimum point of its marginal cost curve
Assume the demand curve for shampoo is downward sloping. If the price of shampoo falls from $1.50 to $1.25 per dozen,
a. the demand for shampoo will fall. b. the demand for shampoo will rise. c. a larger quantity of shampoo will be demanded. d. a smaller quantity of shampoo will be demanded.
Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these pairs in the U.S. Which pair of GDP growth rates and unemployment rates is realistic?
a. 10 percent, 1 percent b. 2 percent, 12 percent c. -1 percent, 8 percent d. -2 percent, 2 percent
A country has a trade surplus when
A. its exports exceed its imports. B. its government spending exceeds its tax revenues. C. its exports equal its imports. D. its exports are less than its imports.