If a firm is operating at a loss in the short run and finds that ...

[jc611]

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.

[paavo]

Answer to Question 1

a

Answer to Question 2

b

[jc611]

Gracias!

[kthug]

TYSM