Based on the figure above, curve B is the firm's
A) marginal cost curve.
B) total cost curve.
C) average total cost curve.
D) total variable cost curve.
E) total fixed cost curve.
D
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A perfectly competitive firm is earning an economic profit when total fixed costs increase. Assuming the firm does not shut down, in the short run the firm will
A) charge a higher price. B) produce more output so the extra revenue will cover the increased costs. C) produce less output to decrease total costs. D) continue producing the same quantity as before but will make less economic profit. E) continue producing the same quantity as before and continue making the same economic profit as before.
Monetary policy will have a large income effect provided the
A) IS curve is flat. B) LM curve is steep. C) IS curve is steep. D) LM curve is flat.