Suppose a competitive firm's total revenue is $1,000,000 where MR = MC, its explicit variable costs are $900,000, its fixed costs are $90,000 of which $60,000 are sunk in the short run. If its implicit opportunity costs are $50,000, the firm should
A) produce because its economic profit is positive.
B) produce because its economic profit is zero.
C) produce even though its economic profit is negative.
D) shut down.
C
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Someone in Germany has just ordered a U.S. car to be exported to Germany. In the U.S. balance of payments, this purchase is a(n)
A) accounting identity. B) special draw. C) surplus item. D) deficit item.
Wages for high-skilled labor have risen more than wages for low-skilled labor even though more people are highly skilled college graduates than ever before. Which of the following explains this?
a. The demand for high-skilled labor has risen alongside the number of college graduates. b. The demand for low-skilled labor has risen while the demand for high-skilled labor remains the same. c. The value of both high-skilled labor and low-skilled labor has risen, but demand for both remains the same. d. The value of low-skilled labor has risen alongside the number of high school graduates.
Engaging in international trade has all of the following effects except:
A. altering prices in different countries. B. it makes use of resources less efficient. C. influencing labor markets in different countries. D. increasing number of goods and services we can consumer in different countries.
The price system
A. is the only way to allocate goods. B. is inefficient. C. requires government help to allocate goods. D. automatically distributes scarce goods.