If price is below average variable costs at all rates of output, the quantity supplied by a perfectly competitive firm will equal
A. the rate of output where marginal revenue equals average fixed costs.
B. the rate of output associated with the break-even point.
C. zero.
D. the rate of output where price equals marginal cost.
Answer: C
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Refer to Edgeworth Box Economy. In an Edgeworth box, points within the region of mutual advantage represent allocations that
a. can be achieved by a competitive market. b. both consumers prefer to the initial endowment. c. exhaust the potential gains from trade. d. are Pareto optimal.
In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now?
a. Unemployed labor is put to work producing jam and bread. b. The economy puts its idle capital to work producing jam and bread. c. The economy experiences economic growth. d. All of the above are correct.
One of the advantages of monetary policy is its speed and flexibility, but there are limitations. Explain.
What will be an ideal response?
The value of GDP can be found by adding together
A. wages, consumption, investment, and imports. B. government purchases, consumption, net exports, and investment. C. consumption, government purchases, transfer payments, and net exports. D. wages, investment, government purchases, and depreciation.