In the short run, a perfectly competitive ball bearing manufacturer will continue to produce at a loss if
a. it is covering all of its fixed cost
b. it is covering all of its variable cost plus part of its fixed cost
c. variable cost is less than fixed cost
d. fixed cost is zero
e. fixed cost is minimized
B
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Using year-by-year data from 1987-2007 shows that
A) there is a strong positive relation between average Latin American money-supply growth and inflation. B) there is a strong negative relation between average Latin American money-supply growth and inflation. C) there is a strong positive relation between average Latin American money-supply growth and deflation. D) it is difficult to find a strong positive relation between average Latin American money-supply growth and inflation. E) there is a weak positive relation between average Latin American money-supply growth and inflation.
Many professional sports athletes have incentive clauses in their contracts. These indicate that
A) the team owner has asymmetric information. B) the athlete might engage in moral hazard, which the team owner wishes to avoid. C) the athlete might engage in adverse selection, which the team owner wishes to avoid. D) the athlete has stronger negotiators.