What decisions must a firm make to maximize profit?
What will be an ideal response?
The firm has three decisions it must make. First it must determine how to produce at the minimum cost. Then it must determine how much to produce. Finally it must decide whether to enter or exit a market.
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Assume a perfectly competitive firm is in long-run equilibrium and there is a decrease in market demand for the firm's output. Which of the following will occur?
A) Existing firms will maintain the original level of output, but they will shift their cost functions down in the short run. B) Existing firms will raise price to cover the reduction in quantity demanded and maintain total revenue in the short run. C) Existing firms will reduce output in the short run. D) Market price will be above its original level.
The U.S. federal debt as a percentage of GDP is currently on the rise
a. True b. False Indicate whether the statement is true or false