In the short run, a firm operating in a competitive industry will shut down if price is
a. less than average total cost.
b. less than average variable cost.
c. greater than average variable cost but less than average total cost.
d. greater than marginal cost.
b
You might also like to view...
Which of the following statements is consistent with the Coase theorem?
A. In the case of zero transaction costs, a property rights assignment (made by a court) will be undone if it benefits the relevant parties to undo it. B. In the case of zero transaction costs, the resource allocative outcome will be the same no matter who is assigned the property right. C. Taxes can do what property rights assignments cannot. D. The market can solve all negative externality problems. E. a and b
According to supply-side economics, a cut in taxes will affect total tax revenue, because ________
A) the level of productivity should fall precipitously with a tax cut B) a tax cut will be followed by an even larger decrease in government spending C) of the resulting increase in saving D) of the positive impact on the level of income
Refer to the table above.below. At a price of $3, the total revenues of sellers will be:
Answer the question based on the following table which shows a demand schedule.
A. $18
B. $12
C. $45
D. $5
Suppose that the current price level is 110, real GDP is $100 billion, and long-run aggregate supply is $95 billion. We can conclude that
A) the price level will fall and input prices will rise until real GDP pulls long-run aggregate supply up to $100 billion. B) aggregate demand will increase until both short-run and long-run aggregate supply equal $100 billion. C) the price level will fall until long-run aggregate supply shifts to $100 billion. D) input prices will rise until real GDP is $95 billion.