Author Question: If the price of a product falls below average total cost in the short run, the firm: a. has an ... (Read 27 times)

K@ · **on:** Jun 30, 2018

If the price of a product falls below average total cost in the short run, the firm:
a. has an economic profit.
b. cannot cover total fixed costs.
c. experiences a loss.
d. must always shut down.
e. should expand output until MC = MR.

Question 2

The price elasticity of demand between milk and soda is likely to be:
a. negative, because the goods are complements.
b. positive, because the goods are complements.
c. negative, because the goods are substitutes.
d. positive, because the goods are substitutes.
e. 0, because the goods are not usually consumed by the same person at one time.