In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: In Figure 23.3, if market demand is at D1, the firm should
A. Produce q1.
B. Leave the market.
C. Shut down.
D. Do any of the above depending on the position of the AVC and the length of the time period.
Answer: D
You might also like to view...
Which of the following statements accurately describes the two measures of the money supply?
A) The two measures do not move together, so they cannot be used interchangeably by policymakers. B) The two measures' movements closely parallel each other, even on a month-to-month basis. C) Short-run movements in the money supply are extremely reliable. D) M2 is the narrowest measure the Fed reports.
Which of the following best describes the impact of the Emissions Trading Scheme in the European Union between 2005 and the late 2000s?
A) Overall greenhouse gas emissions increased. B) Overall greenhouse gas emissions decreased. C) Overall greenhouse gas emissions were totally eliminated. D) Overall greenhouse gas emissions were constant.