If price is between the break-even point and the shutdown point, in the long run the firm will
A. operate.
B. shut down.
C. stay in business.
D. go out of business.
D. go out of business.
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Why do almost all models begin with assumptions?
What will be an ideal response?
Which of the following statements is true of bond markets?
a. A small firm can easily raise funds by issuing bonds because an investor can get a large percentage of ownership with considerably less amount of money. b. A small firm can easily raise funds by issuing bonds because investors believe that small firms have a higher potential of growth. c. A large and famous firm can easily raise funds by issuing bonds because investors are familiar with the company and are therefore more willing to consider investing in it. d. A large and famous firm can easily raise funds by issuing bonds because only large firms can afford the minimum cost of entering the bond market.
Cynthia sells walnut cookies in a perfectly competitive market where the market price is $10 per cookie. Cynthia produces 500 cookies per month with a marginal cost of $5 per cookie, an average variable cost of $3 per cookie, and an average total cost of $7 per cookie. Cynthia is likely to: a. increase the production of cookies to maximize profit
b. decrease the production of cookies but stay open. c. continue to maintain current production levels to minimize her losses. d. shut down immediately to minimize her losses.
If two goods are substitutes, then their cross-price elasticity of demand is
A. between zero and minus one. B. negative. C. positive. D. zero.