Consider a perfectly competitive firm for which MC equals ATC at the $10 level. If the market price is $10,
a. the firm can earn an economic profit.
b. the firm will suffer an economic loss but should operate in the short run.
c. the best the firm can do is to break even.
d. the firm should shut down in the short run.
c. the best the firm can do is to break even.
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For allocative efficiency to hold
A) average total cost is minimized in production. B) average variable cost is minimized in production. C) price must equal the marginal cost of the last unit produced. D) price must equal marginal revenue of the last unit sold.
If the resources within a nation are not being fully or efficiently utilized, it means:
a. that the nation is operating at a point inside its production possibilities curve. b. that the nation is operating at a point outside its production possibilities curve. c. that the nation is operating at a point along its production possibilities curve. d. that the nation is probably technologically advanced. e. the government of that nation should seize ownership of the resources in order to attain the necessary efficiencies.
When the Fed purchases additional securities and shifts to a more expansionary monetary policy,
a. the inflation rate will rise almost immediately. b. the growth of output and employment will increase quickly. c. several months will typically pass before the shift in policy exerts much impact on output and employment. d. this policy will eventually lead to a decline in the general level of prices if it is continued for a prolonged period of time.
The life cycle approach to health care puts people in the position of projecting how many resources they will need to pay for health care when they are old, a problem called the health care poverty problem.
Answer the following statement true (T) or false (F)