Answer the following questions true (T) or false (F)
1. In the short run, if price falls below a firm's minimum average total cost, then the firm should shut down.
2. If price is equal to average variable cost, then a perfectly competitive firm breaks even.
3. For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve.
1. FALSE
2. FALSE
3. TRUE
You might also like to view...
If an increase in government spending of $20 million results in a $100 million increase in GDP, then the spending multiplier is
A) 0.2. B) 2.5. C) 5. D) 20.
Two variables are uncorrelated if:
A. they move in the same direction. B. they move in the opposite direction. C. their movements tend to be unrelated. D. one is simply a multiple of the other.
A perfectly competitive firm is a price taker because
A) many other firms produce the same product. B) only one firm produces the product. C) many firms produce a slightly differentiated product. D) a few firms compete. E) it faces a vertical demand curve.
Refer to Table 21-2. Using the table above, what is the approximate growth rate of real GDP from 2014 to 2015?
A) 1% B) 2% C) 3% D) 4%