Author Question: If the market price is 5 and you are currently producing at a level where average total cost is 3 ... (Read 17 times)

washai · **on:** Jun 30, 2018

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.