A competitive price-searcher firm is currently producing 10 units of output. At this level of output the firm is charging a price equal to $10, has marginal revenue equal to $6, has marginal cost equal to $6, and has average total cost equal to $12 . From this information we can conclude that
a. the firm is currently earning zero profit.
b. the profits of the firm are negative.
c. firms are likely to enter this market in the long run.
d. the firm would earn more profit by reducing output.
B
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In the above figure, if the natural monopoly is not regulated then consumer surplus is
A) $48 million. B) $60 million. C) $108 million. D) $192 million.
In autarky, when a community maximizes its standard of living, its production point is
A) below the production possibility frontier. B) on the production possibility frontier. C) above the production possibility frontier. D) Can't tell without more information.
If actual output is greater than equilibrium output, firms will ________ output to keep from ________ inventories
A) increase; accumulating B) increase; depleting C) decrease; depleting D) decrease; accumulating
A lump-sum tax is:
A. a head tax. B. the most efficient form of taxation. C. a tax that charges the same amount to each taxpayer. D. All of these statements are true.