If ________, a firm would shut down in the short run and exit the industry in the long run.
A. TR = TC
B. TR > TFC
C. TR > TVC but TR < TC
D. TR < TVC
Answer: D
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Day care is provided by a competitive constant-cost industry at a price of $40 per child per day. The government wants to increase the availability of day care and thus chooses to build and operate 50 new day care centers across the nation.
(i) In the short run, what happens to the price of day care? Does the total amount of day care provided increase in the short run? What happens to the profits of day care centers? (ii) In the long run, what happens to the size of the day care industry? What happens to the price of day care and the profits of day care centers? Does the total amount of day care provided increase in the long run?
A discouraged worker is: a. one who opts to quit work to attend college
b. one who opts to quit searching for work after unsuccessfully seeking employment. c. a part-time worker who would like to work more hours. d. none of the above.
If the price of lunch at the school cafeteria increases and cafeteria revenue remains constant, the elasticity of demand for a school lunch must be
A. elastic B. perfectly elastic C. unit elastic D. inelastic E. perfectly inelasti
Total income
A. includes only wages received by workers. B. is the yearly amount earned by owners of the nation's resources. C. excludes profits. D. includes only wages and interest payments.