Author Question: Firms should shut down in the short run whenever price is less than the average total cost. a. True ... (Read 51 times)

bobthebuilder · **on:** Jun 30, 2018

Firms should shut down in the short run whenever price is less than the average total cost.
a. True
b. False
Indicate whether the statement is true or false

Question 2

On account of a massive construction boom in a country, the demand for iron ore increases substantially. This causes iron ore prices to escalate. Producers increase iron ore mining considerably in the short run, in spite of knowing that this will adversely affect future availability of ore. Which of the following is most similar to the scenario described above?
a. Corn producers hoard their supplies in order to induce a price hike.
b. Petroleum manufacturers increase extraction in response to sky-rocketing fuel prices.
c. The government of a country makes aforestation mandatory for lumber firms.
d. Impressive revenue generation induces the government of a country to impose additional fuel surcharge.
e. To discourage smoking, the government of a country increases sales tax on cigarettes.