If the market price is 5 and you are currently producing at a ...

[washai]

If the market price is 5 and you are currently producing at a level where average total cost is 3 and falling, you should:
 a. b or c, it doesn't matter.
  b. shut down.
  c. produce only enough to cover variable costs.
  d. produce where MR = MC.
  e. produce until the average total cost and average revenue are equal.

Question 2

The responsiveness of suppliers to changing prices is called the:
 a. cross elasticity.
  b. supply elasticity.
  c. supply period.
  d. long-run.
  e. market-day.

[annierak]

Answer to Question 1

d

Answer to Question 2

b

[washai]

Excellent

[helenmarkerine]

Gracias!