A firm will choose to operate rather than shut down as long as
A. price is greater than or equal to AVC.
B. AFC is greater than AVC.
C. price is greater than or equal to AFC.
D. AVC is greater than MC.
Answer: A
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In the long run, a firm will exit an industry if the market price is less than its
a. break-even price. b. shutdown price. c. marginal cost. d. fixed cost.
When actual output is less than potential output, there is ________ output gap and the inflation rate will ________.
A. an expansionary; be lower than the expected rate of inflation B. a recessionary; exceed the expected rate of inflation C. a recessionary; be lower than the expected rate of inflation D. an expansionary; exceed the expected rate of inflation
Which of the following CORRECTLY describes the above figure?
A) There is no relationship between x and y. B) There is a positive relationship between x and y. C) There is a negative relationship between x and y. D) None of the above answers are correct.
A study by Edward Prescott found that the ________ marginal tax rates in the United States relative to Europe resulted in a ________ quantity of labor supplied in the United States
A) higher; smaller B) lower; smaller C) lower; larger D) higher; larger