When a perfectly competitive firm decides to shut down, it is most likely that
a. marginal cost is above average variable cost.
b. marginal cost is above average total cost.
c. price is below the firm's average variable cost.
d. fixed costs exceed variable costs.
c
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All the decisions made by people who operate firms have one overriding objective, which is to ________
A) make maximum attainable profit B) maximize the firm's total revenue C) maximize the firm's market share D) maximize the quantity that the firm sells
Answer the following statement(s) true (T) or false (F)
1. Welfare effects are the gains and losses associated with government intervention in markets 2. Without a tax, tax revenues are zero. 3. When a tax gets larger, deadweight loss gets much smaller. 4. Other things being equal, the more elastic the demand or the supply curve, the smaller the eadweight loss. 5. The Law of Increasing Opportunity Cost refers to the condition where the opportunity cost of producing additional units of a good rises as society produces more of that good