If a firm shuts down in the short run, it will
a. incur losses equal to its fixed costs
b. produce at the output level where MC = MR
c. reduce its losses to zero
d. do this because P > AVC
e. have total revenue greater than total fixed costs
A
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Suppose the Fed bought $150 million of U.S. securities from security dealers. The reserve requirement is 20 percent, and there are no initial excess reserves. A few weeks later, if the public's holdings of currency are constant and the banks have loaned all excess reserves, the money supply will increase by:
a. $150 million. b. $300 million. c. $600 million. d. $750 million.
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to remain the same and monetary base to remain the same. b. Demand for real goods and services to remain the same and M2 money supply to fall. c. Demand for real goods and services to rise and M2 money multiplier to remain the same. d. Demand for real goods and services to rise and M2 money supply to rise.