"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, this decision may be:
a. correct if price is less than average variable cost
b. incorrect because a firm experiencing economic losses should never continue to operate.
c. correct if the firm is covering all of its variable costs.
d. incorrect since a firm should shut down whenever price falls below average total cost in the short run.
c
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Refer to Figure 2-8. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production?
A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses
If the bidders at a first-price auction have true values of $8, $7, $6, and $5, the item will sell for
a. $8 b. $7 c. just over $8 d. just under $7
If we consider the reality that each worker has different skills, then the production possibilities frontier
A. would display a constant opportunity cost of a good as more of that good is produced. B. would display a decreasing opportunity cost of a good as more of that good is produced. C. would display an increasing opportunity cost of a good as more of that good is produced. D. cannot be drawn, as too many variables would need to be taken into consideration.
Overfishing and extinction of species arise because of:
a. an abundance of natural resources. b. communist countries. c. the lack of incentive to take care of these species. d. private ownership of these resources. e. a high degree of economic freedom in all countries.