The long-run exit rule is to exit the industry if:
A. P > AVC.
B. P < AVC.
C. P < ATC.
D. P > ATC.
Answer: C
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In the above figure, assume d1 is the demand curve faced by this firm. Which is TRUE?
A) This firm is earning an economic profit. B) This firm is experiencing an economic loss. C) This firm is breaking even. D) This firm's total costs equal EJA0.
In the Cournot duopoly model, each of the two firms, in determining its profit-maximizing price-output level, assumes that the other firm's ____ will not change
a. price b. output c. marketing strategy d. inventory e. none of the above
A worse of a recession is called _______ in the business cycle.
a. a downturn b. a peak c. a trough d. an expansion
A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x,
a. social value = private value = private cost < social cost. b. private cost < social cost = private value = social value. c. social cost = private cost = private value < social value. d. social cost = private cost = private value = social value.