A competitive firm currently produces and sells 800 units of output at a price of $10 per unit. The firm's fixed cost is $4,000 and its variable cost is $8,300 . In the short run, should the firm continue to operate?
No, the firm should shut down, since the price of $10 falls short of average variable cost, which is $10.375.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Refer to the scenario above. The time value of the amount deposited is:
A) $300. B) $1,000. C) $1,300. D) $2,300.
Other things the same, in the Solow model in the steady state, a higher rate of population growth ________ the level of output per worker
A) leads to an increase in B) has no long-run effect on C) has an ambiguous effect on D) leads to a decrease in
The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains have not kept pace with the 3 percent rate of inflation. The Secretary's statement is a (n) ____ economic statement, and the labor head's statement is a (n) ____ economic statement.
A. normative; normative B. normative; positive C. positive; normative D. positive; positive