Suppose a firm has unavoidable fixed costs of $500,000 per year, and it decides to shut down. What is the firm's producer surplus?
A) PS is positive in this case, but we cannot determine the value based on the given information
B) PS is negative in this case, but we cannot determine the value based on the given information
C) PS = -$500,000
D) PS = 0
A
You might also like to view...
Suppose real GDP was 100 in year 1 and 105 in year 2. The growth rate of real GDP is
A) 0.5 percent. B) 1.5 percent. C) 2.5 percent. D) 5 percent.
Regression analysis is designed to show any systematic pay differences between men and women
A) that are based only on gender difference. B) that are based on differences in education levels and majors. C) that are based on differences in career choices. D) that are based on differences in job experience.
Refer to Figure 13A.2. Compared to curve s1Y, curve s2Y represents:
A. a decrease in capital deepening. B. a higher saving rate. C. a decrease in depreciation. D. a decrease in original capital stock.
In the short run, if a firm's total variable cost curve lies everywhere above its total revenue curve, the firm should produce
a. the output level that minimizes average total cost b. the output level that minimizes average variable cost c. the output level that minimizes the distance between marginal cost and marginal revenue d. the output level that maximizes the distance between marginal cost and marginal revenue e. no output