Bette's Breakfast, a perfectly competitive eatery, sells its "Breakfast Special" (the only item on the menu) for $5.00. The costs of waiters, cooks, power, food etc. average out to $3
95 per meal; the costs of the lease, insurance and other such expenses average out to $1.25 per meal. Bette should A) close her doors immediately.
B) continue producing in the short and long run.
C) continue producing in the short run, but plan to go out of business in the long run.
D) raise her prices above the perfectly competitive level.
E) lower her output.
C
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The yield to maturity for a discount bond is ________ related to the current bond price
A) negatively B) positively C) not D) directly
Suppose that the capital stock initially is 1000, the depreciation rate is 0.06, and net growth of the capital stock is 120. This makes investment equal to
A) 180. B) 60. C) 127.2. D) 112.8
Refer to the above figure. Which panels represent long run equilibrium for the perfectly competitive firm and monopolistic competitive firm, respectively?
A) Panel C and Panel A B) Panel C and Panel B C) Panel B and Panel C D) Panel C and Panel D
The fee that insurance companies collect in exchange for covering unpredictable costs is called a:
A. premium. B. ultimatum. C. prepaid event charge. D. preventative payment.