A firm that shuts down in the short run experiences losses equal to
A. total fixed costs.
B. zero.
C. total variable costs.
D. total marginal costs.
Answer: A
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If education produces positive externalities and the government does not intervene in the market, we would expect
a. the equilibrium price to be higher than the optimal price. b. the equilibrium quantity to be lower than the optimal level. c. the equilibrium quantity to be higher than the optimal level. d. both a and b are correct
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