The Razor-Thin Disposable Razor Company is a perfectly competitive firm producing where MR = MC. The current market price of a disposable razor is $3.00. The firm sells 1,800 disposable razors. Its AVC is $2.00 and its AFC is $1.50. What should Razor-Thin do?
A. Decrease production so that AVC will decrease.
B. Continue to produce because price exceeds AVC.
C. Shut down and produce zero razors because price is less than ATC.
D. Increase production so that AFC will decrease.
Answer: B
You might also like to view...
The above table gives data for the nation of Sueland. What is the government sector balance?
A) $1,772 billion B) $32 billion C) -$43 billion D) -$32 billion
A . How did the National Bank Act of 1864 tighten the money supply? b. What was the weakness of the National Bank Act of 1864?
If China experienced capital flight, the supply of Chinese yuan in the market for foreign-currency exchange would shift
a. left, which would make the real exchange rate of the Chinese yuan appreciate. b. left, which would make the real exchange rate of the Chinese yuan depreciate. c. right, which would make the real exchange rate of the Chinese yuan appreciate. d. right, which would make the real exchange rate of the Chinese yuan depreciate.
Refer to the information provided in Figure 1.5 below to answer the question(s) that follow.
Figure 1.5Refer to Figure 1.5. Which of the Panels shows a curve or line that has a slope that is positive and decreasing?
A. A B. B C. C D. D