Author Question: If a firm is operating at a loss in the short run and finds that its price is greater than average ... (Read 127 times)

jc611 · **on:** Jun 30, 2018

If a firm is operating at a loss in the short run and finds that its price is greater than average variable cost, then in the short run:
a. it should produce where MR = MC.
b. it should produce zero output.
c. it should go out of business.
d. total revenue is less than total variable costs.
e. total revenue is greater than total costs.

Question 2

As the period for firms to expand output is lengthened, the elasticity of the market supply curve will:
a. approach zero.
b. increase.
c. decrease.
d. remain the same since time does not affect the elasticity of market supply.