Pappy's Popcorn Emporium operates in a perfectly competitive industry and hires you as an economic consultant. Pappy's is currently producing at a point where market price equals its marginal cost. Its market price is greater than its average variable cost but less than its average total cost. You advise Pappy's to
A. raise its price until it breaks even.
B. lower its price so that it can sell more units of output.
C. cease production immediately because it is not covering its operating costs.
D. produce in the short run to minimize its loss, but exit the industry in the long run.
Answer: D
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Refer to Table 20-9. Suppose that the data in the table above reflect the price levels in the economy. Given that data, we can say that the cost of living rose by ________ between 2015 and 2016?
A) 2% B) 5% C) 8% D) 11% E) 13%
Which of the following is most likely to result in unemployment?
a. Aggregate demand grows more rapidly than aggregate supply. b. Aggregate demand and aggregate supply grow at the same rate. c. Aggregate supply grows more rapidly than aggregate demand. d. Neither aggregate demand nor aggregate supply grows at all.