A firm encounters its "shutdown point" when:
A) average total cost equals price at the profit-maximizing level of output.
B) average variable cost equals price at the profit-maximizing level of output.
C) average fixed cost equals price at the profit-maximizing level of output.
D) marginal cost equals price at the profit-maximizing level of output.
B
You might also like to view...
Costs that change as output changes are called incremental costs
Indicate whether the statement is true or false
Under adaptive expectations theory, an increase in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate
a. increases; increases b. increases; decreases c. increases; does not change d. decreases; increases
The passive approach to resolve a contractionary gap results in a decrease in the price level, and the active approach to resolve a contractionary gap results in an increase in the price level
Indicate whether the statement is true or false
Refer to the information provided in Table 13.3 below to answer the question(s) that follow. Table 13.3Price ($)Quantity4.001003.502003.003002.504002.005001.506001.00700Refer to Table 13.3. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $1 per unit of providing the product, what is the maximum profit the monopoly can earn?
A. $300 B. $600 C. $900 D. $1,000