Can a firm make losses by producing the rate of output at which marginal revenue equals marginal cost? Why?
What will be an ideal response?
Even when a firm is producing the output rate at which marginal revenue equal to marginal cost, there is no guarantee that it makes profits. Market price is affected by market supply and market demand conditions. If price falls below average total costs, the firm makes a loss. However, the firm is doing its best and minimizing economic losses by producing the rate of output at which marginal revenue equals marginal cost.
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Unemployment insurance is:
A. offered by the government as a way to affect the level of seasonal unemployment. B. money that is paid by the government to people who are unemployed. C. offered by the government as a way to affect the level of cyclical unemployment. D. money that is paid to the government by employers who lay off employees.
In an open economy, how many TVs will this country import?
A. 120,000 B. 60,000 C. 30,000 D. 90,000