A firm should shut down production when
A. P = minimum ATC.
B. P > minimum AVC.
C. P = MC.
D. P < minimum AVC.
Answer: D
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When Ramona is in consumer equilibrium
A) her total utilities of all goods are equal. B) she is maximizing her utility, given her income and the prices of goods and services. C) her total utility per dollar spent is equal for all goods. D) any change in prices would make her worse off.
The concept of adverse selection helps to explain all of the following EXCEPT
A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets. B) why indirect finance is more important than direct finance as a source of business finance. C) why direct finance is more important than indirect finance as a source of business finance. D) why the financial system is so heavily regulated.
The fluctuations in both money supply growth and the federal funds rate during 1979-1982 suggest that the Fed
A) had shifted to borrowed reserves as an operating target. B) had shifted to total reserves as an operating target. C) had shifted to the monetary base as an operating target. D) never intended to target monetary aggregates.
Capital is a good used in the production of goods that households consume
Indicate whether the statement is true or false