In the long run which of the following is true?
A) There are no fixed costs.
B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology.
C) The firm can vary its explicit costs but not its implicit costs.
D) Total cost = fixed cost + variable cost.
A
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The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
What rule(s) should a firm follow in deciding optimum output for profit maximization?
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
The equilibrium rent for marginal land
a. equals zero. b. depends on the supply and demand of land. c. exceeds the opportunity cost of the land. d. is always greater than the equilibrium rent for nonmarginal land.