The president of a company is told that the fixed costs next year will be higher than anticipated. Even so he has told his operations managers that this should not affect their production levels. Comment on this statement
What will be an ideal response?
The statement is correct. Higher fixed costs won't affect the marginal or variable costs of the firm. The profit-maximizing production decision is predicated on equating marginal revenue and marginal cost. Neither of these change when fixed costs change.
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The welfare reforms of 1996 were entirely driven by flawed character biases
Indicate whether the statement is true or false
The person least likely to receive a payment from a corporation in a year of losses is the
A) bank that loaned money to the corporation. B) bondholder. C) preferred stockholder. D) common stockholder.
Suppose that the government wishes to finance a one-year war. GDP in the nation before the war is $1,000 . and there are no taxes, no government spending, and no private saving. Private consumption is $1,000 . The government chooses to finance the war by selling Treasury bonds totaling $100 at 10 percent interest. The result is that private consumption becomes
a. $100 b. $900 c. $990 d. $1,000 e. $1,100
The most commonly used negative incentive used by firms is:
A. temporary layoffs. B. dismissal. C. verbal reprimands. D. unpaid suspensions.