Solved

-In Exhibit I-6, the Price Is Fixed at $35

Question 133

Multiple Choice

-In Exhibit I-6, the price is fixed at $35. This firm is currently operating where MR = MC. Which of the following is true in the short run? A) Price < AVC and this firm should shut down. B) This firm is earning a profit of zero. C) This firm could increase profits by increasing output. D) Price > ATC and the firm is earning a positive profit. E) Price > AVC, and the firm should stay at its current output.
-In Exhibit I-6, the price is fixed at $35. This firm is currently operating where MR = MC. Which of the following is true in the short run?


A) Price < AVC and this firm should shut down.
B) This firm is earning a profit of zero.
C) This firm could increase profits by increasing output.
D) Price > ATC and the firm is earning a positive profit.
E) Price > AVC, and the firm should stay at its current output.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q128: Consider a firm with the following cost

Q129: There may be other goals an entrepreneur

Q130: Suppose a fishing boat currently brings 10,000

Q131: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB10702/.jpg" alt=" -In Exhibit I-8,

Q132: The lesson learned from the discussion about

Q134: Picture the curve. The total revenue curve

Q135: If the price doesn't change, no matter

Q136: John K. Galbraith and Lester Thurow both

Q137: Think about a publishing firm that uses

Q138: When a business finds its obligations are