In the long run, when price is less than average total cost for all possible levels of production, a firm in a competitive market will choose to exit (or not enter) the market
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose a firm doubles its employment of all inputs in the long run. If this action more than doubles the amount of output produced, then this firm is experiencing
a. increasing returns to scale. b. diminishing marginal returns. c. technological progress. d. positive marginal revenue.
What is the rationale behind a cap-and-trade emission allowance system?
A) It creates a market for externalities. B) It disciplines polluting firms by specifying the maximum amount of emissions allowed and gives them permits to pollute up to their allowance. C) It provides firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance. D) It raises revenue for the government through the sale of permits.
All economic questions arise from the fact that resources are unlimited
Indicate whether the statement is true or false
Suppose a tax has been imposed in the graph shown. Which kind of tax is most likely demonstrated by this graph?
A. A tax on sellers
B. A tax on buyers
C. A tax on big corporations
D. A price ceiling