When the firm is at its shutdown price
a. it has losses equal to fixed costs.
b. break-even line right at bottom of MC
c. shut down price is below AVC
d. all of the above
Ans: d. all of the above
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In the above figure, the relationship between costs and quantity is negative
A) between point A and point B. B) between point B and point C. C) along the entire curve. D) nowhere along the curve.
What happens to the price elasticity of demand moving down along a downward-sloping, linear demand curve?
What will be an ideal response?
The relevant market is defined as the set of goods whose
a. price elasticities of demand are low b. cross elasticities with other goods outside the set are high c. price elasticities of demand are high d. income elasticities of demand are high e. cross elasticities with other goods in the set are high
A merchandiser decides to sell corn to a Blair, NE location and gain $0.17/bu on the trade (after transport). He/she can obtain the corn for this opportunity at a net cost of $0.10/bu. The merchandiser who made these transactions, is taking advantage of an opportunity for _________:
a. Storage opportunities b. Monopoly gains c. Monopsony gains d. Arbitrage