Figure 6.2 shows the cost structure of a firm in a perfectly competitive market. Suppose the current market price is $6 and the firm produces at a given output level. If the firm's total fixed cost increases due to a new government regulation, the short-run response of the firm should be to:(Note: since the question does not restrict the firm's response to the short run, we can't rule out that the rise in fixed cost will push the firm below the breakeven point and that the firm will exit the industry in the long run, thus
decreasing its current output level.)
A. produce its current output level.
B. decrease its current output level.
C. increase its current output level.
D. There isn't sufficient information.
Answer: A
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a. True b. False Indicate whether the statement is true or false
When a tax is progressive, the average tax rate:
A. is constant with income. B. increases with income. C. decreases with income. D. first increases with income, then decreases with income.
Which of the following statements is correct?
A. An increase in the price of C will decrease the demand for complementary product D. B. A decrease in income will decrease the demand for an inferior good. C. An increase in income will reduce the demand for a normal good. D. A decline in the price of X will increase the demand for substitute product Y.
The components of organizational architecture are ________.
A. likely to promote corporate culture B. likely to lead to incentive problems C. independent of each other D. interdependent on each other