When market conditions in a price-taker market are such that firms cannot cover their production costs,
a. the firms will suffer long-run economic losses.
b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits.
c. some firms will go out of business, causing prices to rise until the remaining firms can cover their production costs.
d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their production costs.
C
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If a 5 percent increase in the price of good A leads to a 4 percent decrease in the demand for good B, then ________
A) the goods are substitutes B) only one good is a normal good C) the goods are complements D) both goods are normal goods
If MUa/Pa is greater than MUb/Pb, and the consumer is consuming both goods, the consumer is not maximizing utility. True or false. Explain
What will be an ideal response?
Full employment: a. exists when, on average, nearly two out of three adults in the labor force are employed. b. exists when everyone who wants a job has one. c. exists when the unemployment rate is zero
d. exists when everyone in the labor force has a job. e. will always include some unemployment.
Pork from pigs can be used to produce bacon or sausage, but not both. If the price of bacon rises for some reason, then, everything else equal: a. the price of sausage will rise
b. the price of sausage will fall. c. the resources used to raise pigs will become less expensive. d. the demand for bacon will decrease.