This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that price is below the minimum average total cost (ATC) but above the minimum average ... (Read 84 times)

azncindy619

  • Hero Member
  • *****
  • Posts: 562
on: Jun 30, 2018
Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC), and the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price taker would:
 a. immediately shut down and get out of the industry.
  b. continue to produce a quantity such that marginal revenue equals marginal cost.
  c. shut down temporarily, in hopes of restarting in the near future.
  d. cut price and expand output in hopes of achieving economies of scale

Question 2

To determine whether two goods are substitutes or complements, an economist would estimate the:
 a. price elasticity of demand.
  b. income elasticity of demand.
  c. cross-elasticity of demand.
  d. price elasticity of supply.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

reelove4eva

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 30, 2018
Answer to Question 1

b

Answer to Question 2

c


azncindy619

  • Member
  • Posts: 562
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

amcvicar

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

The term pharmacology is derived from the Greek words pharmakon("claim, medicine, poison, or remedy") and logos ("study").

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Primary production increases with an increase in total phosphorus concentration. Primary production increases with an increase in total phosphorus concentration.
(a) Mean duration (days) and (b) average maximum depth (mm) of snow cover throughout northern latitu (a) Mean duration (days) and (b) average maximum depth (mm) of snow cover throughout northern latitu
Total Solid Waste, MSW per Capita Total Solid Waste, MSW per Capita
Canada Total Energy Consumption by Fuel Type Canada Total Energy Consumption by Fuel Type
Desired Fertility versus Total Fertility Rate in Developing Countries Desired Fertility versus Total Fertility Rate in Developing Countries
Cost Accounting 14 Cost Accounting 14
Video: Medullary osmotic gradient - influencing factors

For a complete list of videos, visit our video library