Using Figure 9.1, explain what a firm would do in the short run if the market price of its product were at P3 and it produced Q3 . Is the firm earning an economic profit? Explain
What will be an ideal response?
The firm would continue to produce in the short run. The firm is enjoying a normal profit since the market price is equal to its average total cost. Normal profit is enjoyed when the firm is able to cover all its economic costs of production.
Economics
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The maximum potential money multiplier is equal to
A) one minus the reserve ratio B) the reserve ratio. C) the inverse of the required reserve ratio. D) the number of dollars on reserve.
Economics
The economic model of consumer behavior explains how consumers' tastes and preferences are formed
Indicate whether the statement is true or false
Economics