Ajax Corporation has recently finished building a new factory. They moved into the factory a month ago and found that it is the perfect size given the amount they want to produce. Ajax is now operating in the
A) production time.
B) corporation time.
C) long run.
D) short run.
Answer: C
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When regulating a natural monopoly, average cost pricing is usually used rather than marginal cost pricing because
A) average cost pricing allows the firm to earn a normal rate of return on investment, while marginal cost pricing leads to economic losses. B) average cost pricing is more economically efficient than marginal cost pricing. C) average cost pricing leads to lower profits than marginal cost pricing. D) average cost pricing leads to a lower market price than marginal cost pricing.
If the price of good X decreases, what will happen to the budget line?
A. It will have a parallel shift inward. B. It will have a parallel shift outward. C. It will become flatter. D. It will become steeper.
An arbitrageur is someone who:
A. simultaneously buys and sells financial instruments to benefit from temporary price differences. B. seeks the high returns that come from the high risk inherent in futures markets. C. always takes the short position in a futures contract. D. always takes the long position in a futures contract.
A decreasing-cost industry will have
A. a downward sloping supply curve in the long run. B. an upward sloping demand curve in the long run. C. a perfectly inelastic long-run supply curve. D. a perfectly elastic long-run supply curve.