Some competitive firms are willing to operate at a loss, in the short run, because:
a. their average variable cost is less than the price.
b. their fixed costs are less than their current losses.
c. their average total cost is less than the price.
d. they do not attempt to maximize profits or minimize losses.
e. their revenues are at least able to cover their fixed costs.
a
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Shortage of a good occurs if: a. the price of the good is higher than the equilibrium price
b. the government imposes a restriction on the consumption of the good. c. buyers want to buy more than sellers want to sell. d. buyers want to buy less than sellers want to sell.
Assuming a reserve requirement of 10 percent, if the Fed sells $20 billion in bonds to the public, the lending capacity of the system will eventually
A. Decrease by $20 billion. B. Increase by $200 billion. C. Decrease by $200 billion. D. Increase by $20 billion.