In the short run, in a perfectly competitive market, a firm will shut down if
A) P < AVC for all levels of output.
B) P < ATC for all levels of output.
C) ATC > P > AVC for all levels of output.
D) P > AFC for all levels of output.
Answer: A
Economics
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The demand curve for an individual seller's product in perfect competition is
A) vertical. B) horizontal. C) downward sloping. D) the same as market demand.
Economics
Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets. To maximize its profit, Hotspur will hire labor up to the point where
A) the marginal revenue product of labor equals the wage rate. B) the marginal revenue product of labor equals the output price. C) the marginal product of labor is no longer positive. D) all economies of scale have been exhausted.
Economics