Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run?
A. Price must be at least equal to average total cost.
B. Price times quantity produced must be equal to or greater than total variable cost for some
level of output or the firm will close down in the short run.
C. Price may be equal to, greater than, or less than average total cost.
D. Price must be equal to or greater than minimum average variable cost for the firm to
continue producing.
Answer: A
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The second-largest component of aggregate expenditures in the United States is _____
a. consumption b. investment c. government expenditure d. imports e. exports
If a local community has only one doctor, the monopoly power of the physician will
a. be small if entry barriers into the local market are high. b. depend on how many other physicians there are in the national market. c. be total since there are not any other providers of the same service in the local market. d. be minimal if the entry barriers restricting competition from other physicians are low.
If the price of a depleting resource does not rise as anticipated, it may be because
A. the government prohibited the methods to extract the resource. B. new methods of mining or refining were developed. C. a price floor was passed by law. D. firms that distribute the resource cartelized.
State and local governments' fiscal policies typically reinforce the fiscal policy of the federal government to counter recession and inflation.
Answer the following statement true (T) or false (F)