In the short run, when the prevailing market price falls below ...

[bobypop]

In the short run, when the prevailing market price falls below the average variable cost curve, a firm in perfect competition will shut down because:
 a. economic profit is zero.
 b. price is less than marginal revenue.
 c. marginal revenue is insufficient to pay average variable cost.
  d. other firms will enter the market seeking profits.

Question 2

The more elastic the supply of a product, the more the actual burden of a tax on the product will:
 a. fall on sellers.
  b. fall on buyers.
  c. fall equally on both buyers and sellers.
  d. create a smaller deadweight loss (or excess burden).

[shoemake]

Answer to Question 1

c

Answer to Question 2

b

[bobypop]

YES! Correct, THANKS for helping me on my review

[yeungji]

Thanks for the timely response, appreciate it