If a firm in a perfectly competitive market faces the cost curves in the graph shown and observes a market price of $10, the firm:
A. can make positive profits by producing more than 43 units.
B. can make positive profits by producing where MC = MR.
C. cannot make positive profits and should shut down in the short run.
D. should continue to operate in the short run, but plan to exit in the long run.
C. cannot make positive profits and should shut down in the short run.
You might also like to view...
Because resources tend to be specialized, if a society chooses to increase production of military goods, this tends to
A. result in a decrease in the opportunity cost of more military goods. B. result in an increase in the opportunity cost of more nonmilitary goods. C. result in an increase in the opportunity cost of more military goods. D. change the position of the production possibilities curve. E. alter the slope of the production possibilities curve.
Hostile takeovers of corporations have been in the business news for some time now. Several states have passed laws making it harder for out-of-state corporations to acquire firms headquartered in their states. Several corporations have established
"golden parachutes" to give executives high payoffs in case of hostile takeover. What market imperfection is likely to be worsened by these actions? Explain.
Paul, a U.S. citizen, builds a telescope factory in Israel. His expenditures
a. increase U.S. and Israeli net capital outflow. b. increase U.S. net capital outflow, but decrease Israeli net capital outflow. c. decrease U.S. net capital outflow, but increase Israeli net capital outflow. d. None of the above is correct.
According to economists, one of the signs of an unhealthy economy is a(n)
A. rising labor productivity. B. increasing real GDP. C. declining real GDP. D. declining unemployment.