If Harold runs a grocery store and is making a normal rate of return, we can infer that he is also making an economic profit.
Answer the following statement true (T) or false (F)
False
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The above figure shows a perfectly competitive firm. If the market price is $5 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
Which of the following products would most closely fit the competitive price-taker model?
a. stereo systems-there are many reputable brands. b. beer-it has many consumers. c. eggs-there are many producers of this relatively homogeneous product. d. automobiles-there are substantial economies of scale in production.
If a firm stops production, then its:
A. variable costs decrease to zero. B. total costs decrease. C. fixed costs stay the same. D. All of these are true.
In the long run, a firm that produces and sells textbooks gets to choose
a. how many workers to hire. b. the size of its factories. c. which short-run average-total-cost curve to use. d. All of the above are correct.