A purely competitive firm is faced with a marginal revenue curve that lies everywhere below the average variable cost curve. Would this firm be able to operate in the short run? Explain
What will be an ideal response?
In order to operate in the short run the firm would have to enjoy at least an operating profit. In this case the firm would never have total revenue that would exceed total variable cost. Therefore, it should shut down.
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In graphing the Solow growth model, the per-person production function is used to derive the ________ per-person line, with the vertical distance between them being ________ per person
A) national saving, investment B) national saving, consumption C) steady-state investment, capital D) steady-state investment, depreciation E) steady-state investment, national saving
A macroeconomic model obeys the "natural rate hypothesis" by incorporating
A) the assumption of nominal wage stickiness. B) a vertical LAS curve. C) imperfect information. D) a vertical AD curve.