When a firm shuts down because the market price of its product is less than the average variable cost of producing that product, the loss it suffers is
A. equal to its total revenue.
B. less than the loss it would earn from continuing to operate.
C. equal to its total variable cost.
D. equal to zero.
Answer: B
You might also like to view...
The above figure shows the U.S. market for replacement cell phone batteries. With free international trade, the United States
A) exports 300,000 batteries. B) imports 500,000 batteries. C) imports 400,000 batteries. D) exports 700,000 batteries. E) imports 800,000 batteries.
If the production of a good creates pollution, then the
A) marginal social benefit curve lies above the marginal private benefit curve. B) marginal social cost curve lies above the marginal private cost curve. C) marginal social benefit curve lies below the marginal private benefit curve. D) marginal social cost curve lies below the marginal private cost curve.
Inoculations of children against infectious diseases are
A) an example of an external benefit. B) an example of an external cost. C) dangerous for society. D) an example of a public good.
The money multiplier equals 1/(1 - R), where R represents the reserve ratio
a. True b. False Indicate whether the statement is true or false