Suppose that a firm is currently earning revenues that are smaller than its total costs. The firm's managers are trying to decide whether or not the firm should shut down in the short run
On what information should the manager's decision be based?
The firm's decision should be solely based on whether its revenues from operating are sufficient to cover its variable costs. If they are, the firm should operate.
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Suppose the rate of inflation in a country increases from 4% to 8% within a few months. This will cause: a. the demand curve for the currency to shift to the right
b. the demand curve for the currency to shift to the left. c. an upward movement along the demand curve for the currency. d. an upward movement along the supply curve for the currency.
One problem with government operation of monopolies is that
a. a benevolent government is likely to be interested in generating profits for political gain. b. monopolies typically have rising average costs. c. the government typically has little incentive to reduce costs. d. a government-regulated outcome will increase the profitability of the monopoly.