Bubba's BBQ has fallen on some hard times. Bubba has analyzed his past revenue and cost information and knows that if he shuts down, he will incur an economic loss equal to $20,000 in remaining lease payments
Apparently, Bubba's current planning horizon is A) the short run because he still faces some fixed costs.
B) the long run because he faces only variable costs.
C) the short run because he faces only variable costs.
D) neither the short run nor the long run because lease payments do not figure into cost determinations.
A
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The minimum efficient scale is
A) the plant size that yields the most profit. B) the smallest output level where the firm finally reaches productive efficiency. C) the level of operation where long-run average costs are lowest. D) the level of output where diminishing returns have not set in yet.
The time-inconsistency problem in monetary policy can occur when the central bank conducts policy
A) using a nominal anchor. B) using a strict and inflexible rule. C) on a discretionary, day-by-day basis. D) using a flexible, discretionary rule.
The rule for efficient output selection is stated as MC = MU. Explain how the rule results in economic efficiency.
What will be an ideal response?
Unlike its competitors, one glass producer can use its equipment to make either windows for houses or windows for cars. Other things equal, compared to its competitors, its supply curve of windows for cars would be: a. more elastic than the supply curves of competitors. b. less elastic than the supply curves of competitors. c. greater than the supply curves of competitors
d. less than the supply curves of competitors.