If the monopoly's demand curve intersects the AVC curve at minimum AVC, the firm will shut down
Indicate whether the statement is true or false
False. If that is the case, marginal cost will intersect marginal revenue at some quantity that is less than the quantity that minimizes AVC. The price that consumers are willing to pay for that quantity will be compared to the AVC for that quantity.
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An aircraft company has signed a contract to sell a plane for $20 million. The firm buying the plane will pay for it in 5 annual payments (at year end) of $4 million
If the firm's cost of capital is 6%, what is the net present value of this payment?
A sunk cost is one that
a. changes as the level of output changes in the short run b. was paid in the past and will not change regardless of later decisions c. should determine the rational course of action in the future d. has the most impact on profit-maximizing decisions e. influences rational decision makers