If the price of its product just equals the average variable cost of production for a competitive firm,
A) total revenue equals total fixed cost and the firm's loss equals total variable cost.
B) total revenue equals total variable cost and the firm's loss equals total fixed cost.
C) total fixed cost is zero.
D) total variable cost equals total fixed cost.
B
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When there is a cost or benefit that affects someone other than the seller and buyer, then there is
A) a tax. B) a subsidy. C) a quantity regulation. D) a price regulation. E) an externality.
A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value. The shoe manufacturer believes that the advertisement will
a. Make the demand for its product more elastic b. Make his customers more price sensitive c. Cause people to directly compare his product to the name brands d. All of the above