Refer to Figure 13-17. In the long run, why will the firm produce Qf units and not Qg units, which has a lower its average cost of production?
A) At Qg, marginal revenue is less than average revenue which will result in a loss for the firm.
B) Although its average cost of production is lower when the firm produces Qg units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss.
C) At Qg, average cost exceeds marginal cost so the firm will actually make a loss.
D) The firm's goal is to charge a high price and make a small profit rather than a low price and no profit.
B
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Which of the following will NOT lead to increased capital investment within a country?
A) increased uncertainty about private property rights B) increased certainty about private property rights C) increased certainty about being able to reap the gains from investing D) the decreased possibility of nationalization of private property
Smoking increases the risk of lung infections not only for active smokers but also for other people inhaling the smoke passively. Which of the following will help in reducing smoking?
A) A corrective tax B) A life insurance C) A health insurance D) A health tax
If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the
A) supply of oil is elastic. B) supply of oil is inelastic. C) demand for oil is inelastic. D) demand for oil is elastic.
Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect:
A. present consumption to rise. B. future consumption to fall. C. a lower rate of growth of real GDP. D. labor productivity to rise.