A firm should shut down in the short run if it s AVC is less than the price it receives per unit of the good.
Answer the following statement true (T) or false (F)
False
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What is the government purchases multiplier if the tax rate is 0.2 and the marginal propensity to consume is 0.8? Assume the economy is closed
A) 2.78 B) 5 C) 6.25 D) 100
If you are willing to purchase a house for $500,000 and you purchase the house for $500,000 . this transaction will generate: a. There is no surplus created for either of the party
b. $0 worth of seller surplus and unknown amount of buyer surplus. c. $0 worth of buyer surplus and unknown amount of seller surplus. d. No information provided.
The multiplier principle illustrates that
a. an increase in investment spending will be multiplied into a larger increase in GDP. b. an increase in GDP will be multiplied into a larger amount of investment spending. c. an increase in GDP will be multiplied into a larger increase in consumer spending. d. investment spending is always a multiple of consumer spending.
Which of the following is a component of predatory pricing?
a. a price reduction after a competitor leaves the market b. a price hike for a specific group of customers c. a price reduction designed to sell tied goods d. a price hike after a competitor leaves the market