Refer to the scenario above. If the government enforces a ban on Firm B, and asks Firm A to carry out all the production:
A) Firm A's marginal cost is likely to decrease, but its average cost is likely to increase.
B) Firm A's marginal cost and average cost are likely to decrease.
C) Firm A's marginal cost is likely to increase, but its average cost is likely to decrease.
D) Firm A's marginal cost and average cost are likely to increase.
D
You might also like to view...
Which of the following is not a symptom associated with a price floor?
a. Excess of quantity demanded over quantity supplied. b. Sellers offering discounts in disguised forms. c. Problem of disposal created by excess supply. d. Survival of inefficient businesses.
Which of the following is true?
a. Monetary policy influences long-term real interest rates more than short-term interest rates. b. Short-term interest rates are primarily determined by real factors and the expected inflation. c. A shift to a more expansionary monetary policy will tend to raise short-term interest rates. d. A shift to expansionary monetary policy that increases the fear of future inflation will tend to increase long-term interest rates.
If the total variable cost curve is a straight line then the
A. total cost curve will also be a straight line. B. total cost curve may or may not be a straight line. C. marginal cost function is upward sloping. D. marginal cost function is downward sloping.
When the wage rate paid to labor is above equilibrium, the:
A. supply of labor increases. B. number of jobs available exceeds the number of workers seeking jobs. C. demand for labor decreases. D. number of workers seeking jobs exceeds the number of jobs available.