The short-run shutdown rule is to shut down if:
A. P > AVC.
B. P < ATC.
C. P > ATC.
D. P < AVC.
Answer: D
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How does a cut in interest rates that increases investment affect the quantity of real GDP demanded, the aggregate demand curve, real GDP, and the price level?
What will be an ideal response?
Economists use the mechanism of supply and demand to study
A. inflation. B. unemployment. C. environmental protection. D. All of these responses are correct.
Use the figure above to answer this question. At a price level of 90
A) people will be forced to cut consumption so that aggregate demand will decrease. B) the aggregate quantity demanded exceeds real GDP and inventories will decrease. C) inventories increase and firms will increase production. D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.
An increase in the price level will shift the aggregate demand curve:
A) rightward. B) leftward. C) both. D) none of the above.