Use the following graph showing the average total cost curve for a perfectly competitive firm to answer the next question.
At the long-run equilibrium level of output, this firm's profit
A. is $400.
B. is zero.
C. is $200.
D. cannot be determined from the information provided.
Answer: B
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A disaster that destroys a large part of current agricultural output will not change LRAS, while a disaster that destroys the capital stock in a major city will reduce LRAS
a. True b. False Indicate whether the statement is true or false
How does an additional individual's consumption of a good that is nonrival-in-consumption, such as a radio broadcast, affect the amount of the good available to other consumers?
a. The amount available to others will decline. b. The amount available to others will increase. c. The amount available to others is unaffected. d. The amount available to others is eliminated.
If people are risk averse regarding environmental damages.
a. Low discount rates should be used b. High discount rates should be used c. Expected values will overstate ecological damages d. Irreversible actions should be taken e. They will generally approve of irreversible projects f. All of the above. g. None of the above.
You win your state lottery. The lottery officials offer you the following options: you can accept annual payments of $50,000 for 20 years or receive an upfront payment of $700,000. Ignoring issues like mortality tables, taxes, etc.; and assuming the first payment is made immediately, what market interest rate would make it more attractive to take the upfront payment?
What will be an ideal response?