In the long run, a profit-maximizing firm will choose to exit a market when
a. average fixed cost is falling.
b. variable costs exceed sunk costs.
c. marginal cost exceeds marginal revenue at the current level of production.
d. total revenue is less than total cost.
d
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If both money demand and commodity demand are unstable, as many activists believe, which type of policy target would most likely lead to a stable economy? (assume no supply-side shocks, and a fixed price level)
A) money supply target B) real GDP target C) interest rate target D) none of the above
Assume a firm is a monopoly and enjoys $10 million in profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years
If there is no discount rate, how much would the firm be willing to pay to deter entry? A) $250 million B) $25 million C) $100 million D) $250 billion