If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52, then to maximize its profit (or minimize its loss) the firm should
A) definitely produce the unit.
B) shut down.
C) not produce the unit but remain open.
D) not produce the unit. Whether the firm should shut down or remain open cannot be determined without more information.
E) produce the unit only if the price exceeds the average fixed cost.
B
You might also like to view...
In the 1980s and most of the 1990s, the federal government
A) ran small deficits. B) ran small surpluses. C) ran large deficits. D) was balanced.
[NeedAttention]
Exhibit 30-5
?
Financial intermediaries are able to act as delegated monitors for individual savers because
A) other investors are unable to gain a free ride on their monitoring efforts. B) borrowers consider this role to be traditional for financial intermediaries and are willing to put up with it. C) the federal government has granted them waivers from laws protecting privacy. D) they employ a vast network of private detectives to carry out their monitoring role.
Economics is an empirical science, which means that economists
A) must use laboratory experiments to test their theories. B) evaluate a model or theory by whether its assumptions are consistent with the real world. C) try to prove their models are true by referring to logic. D) look for evidence to determine whether the model is useful or not.