A company finds that at its present level of production, MC = AVC at $15, MC = ATC at $20, and MC = MR at $17. Your advice to the firm regarding its short-run operations is
A) to continue production, as it is earning an economic profit of $2 per unit.
B) to continue production, as it is earning an economic profit of $3 per unit.
C) to shut down.
D) to continue production at a loss.
Answer: D
You might also like to view...
Real GDP refers to ________.
A. GDP data that does not reflect changes in both physical output and the price level B. the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income C. GDP data that embodies changes in the price level but not changes in physical output D. GDP data that has been adjusted for changes in the price level
Secondary markets make financial instruments more
A) solid. B) vapid. C) liquid. D) risky.
In the "cost of capital channel" of monetary policy, a higher interest rate __________ spending
A) raises consumption B) raises investment C) lowers consumption D) lowers investment
The losers when the United States institutes trade restrictions include
a. U.S. consumers of imported goods, U.S. producers who use imported intermediate goods, and, if other countries retaliate, U.S. exporters b. U.S. producers of goods that compete with imported goods only c. U.S. consumers of imported goods and U.S. producers of goods that compete with imported goods d. all U.S. producers of all goods and U.S. exporters e. only U.S. exporters