If price equals average total cost at the profit-maximizing output level, then in the short run,
a. profit is positive
b. profit is negative
c. the firm will go out of business
d. the firm will earn zero profit
e. the firm's supply curve is horizontal
D
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Suppose that in the market for bottled water, the market supply is QS = 14 + 20Pand the market demand is QD = 74 – 10P, then equilibrium price is
a. $2 b. $54 c. $6 d. none of the above
The figure above shows the market for brooms. Which of the following could lead to the production of fewer than 600 brooms?
A) a monopoly B) a deadweight loss C) subsidies D) an external cost E) a big tradeoff
A market economy produces the optimal amount of each good at least cost where:
A) P > ATC. B) P = ATC. C) P > AVC. D) P = MR.
After reading an economics textbook about labor supply and utility maximization, Amelia Ruiz said, "I don't allocate my time like that.". Her professor replied,
a. "You caught us. Economists do not know what they are talking about.". b. "This proves that you will always choose to spend your time in nonmarket work.". c. "You act as if you allocated your time to derive the same expected net marginal utility from the last unit of time spent in each alternative use.". d. "Don't you want to use your unlimited resources to satisfy your finite wants?" e. "It is obvious that labor supply is a derived demand based on marginal revenue product.".