Use the figure below to answer the following question.What area represents producer surplus after the government imposes the excise tax on the market?

When demand is unit elastic, an increase in price will cause total revenue to increase, stay the same, or decrease, depending on the corresponding change in quantity demanded

Indicate whether the statement is true or false

"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, this decision may be: a. correct if price is less than average variable cost

b. incorrect because a firm experiencing economic losses should never continue to operate. c. correct if the firm is covering all of its variable costs. d. incorrect since a firm should shut down whenever price falls below average total cost in the short run.