Under which of the following conditions will a profit-maximizing perfectly competitive firm shut down in the short run?
A) when it is making a normal profit
B) whenever its marginal cost is less than its marginal revenue
C) when the price is less than its minimum average variable cost
D) whenever its total cost is greater than its total revenue
E) when the price is less than its minimum average total cost
C
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A department store buys a wool coat for $120 and sets its retail price at $300 . The coat costs $85 to produce. When the coat doesn't sell, the store marks the price down to $200, then $100, and finally $70 . At $70, Amy buys the coat. What was the coat's true value? Why?
Say's law states that demand creates its own supply
Indicate whether the statement is true or false
Efficient production implies that it is:
A) possible to produce more of all goods and services. B) it is possible to produce more of one good without producing less of another. C) not possible to produce more of one good without producing less of another good. D) producing at a combination of goods which lies between the production possibilities curve and the origin.
A change in the relative prices of two goods is represented graphically by:
A. a change in the slope of an indifference curve. B. a rightward parallel shift of the budget line. C. a leftward parallel shift of the budget line. D. a change in the slope of the budget line.