Assume a profit maximizing firm's short-run cost is TC = 700 + 60Q. If its demand curve is P = 300 - 15Q, what should it do in the short run?
A) shut down
B) continue operating in the short run even though it is losing money
C) continue operating because it is earning an economic profit
D) Cannot be determined from the above information
C
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Which barrier to entry into the market is created when firms engage in predatory pricing?
a. Control of a physical resource b. Intimidating potential competitors c. Legal monopoly d. Natural monopoly
Using Figure 9.1, the amount of autonomous consumption is
A. $500 billion. B. Equal to disposable income when the consumption line crosses the 45-degree line. C. Different at every income level. D. $750 billion.
Normative economic analysis involves
A) positive analysis. B) value judgments. C) if-then statements. D) objective descriptions of the way things are.
Refer to Scenario 3.3 below to answer the question(s) that follow.SCENARIO 3.3: -Mustard and mayonnaise are substitutes. -Mustard and relish are complements. -Mustard is a normal good. -During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.Refer to Scenario 3.3. If at the same time of the mustard recall, consumer income also decreased. Then, ceteris paribus, in the market for mustard this would have caused
A. the equilibrium price to increase and the equilibrium quantity to decrease. B. both the equilibrium price and quantity to decrease. C. the equilibrium quantity could have increased, decreased, or remained the same and the equilibrium price to decrease. D. the equilibrium price to either increase, decrease, or remain the same and the equilibrium quantity to decrease.