ofthefollowingdoesnotapplytoafirmthathasshutdown.docVIP

26. Which of the following does not apply to a firm that has shut down in the short run? a. variable cost is zero b. total revenue is zero c. total cost exceeds total revenue d. total cost is zero e. fixed cost is positive ____ 27. If a firm is experiencing an economic loss in the long run, then a. it must be experiencing an accounting loss b. it should stay in business if it can cover its fixed costs c. the market must be too large d. it should exit from the industry e. price exceeds marginal cost ____ 28. Which of the following is true about perfect competition? a. each firm faces a downward-sloping demand curve b. each firm must face a horizontal demand curve c. firms are price-makers d. marginal cost equals average cost e. firms can increase sales by lowering their price ____ 29. When a firm faces a downward-sloping demand curve, marginal revenue a. is constant regardless of how much output the firm produces b. is below the demand curve c. increases as the firm produces more output d. decreases if the firm produces less output e. is equal to the price per unit of output ____ 30. If a firm faces a horizontal demand curve, marginal revenue a. is constant regardless of how much output the firm produces b. decreases as the firm produces more output c. increases as the firm produces more output d. decreases if the firm produces less output e. is less than price at most possible output levels ____ 31. If a firm shuts down in the short run, a. it exits the industry b. losses would equal its variable costs c. losses would equal its fixed costs d. profits would be zero e. losses would equal to zero ____ 32. The principal-agent problem in firms creates difficulties when a. agents and managers strongly agree with the organizations goals b. marginal cost rises in response to output changes c. agents have incentives to act in ways that support profit maximization d. agents act in ways that work against profit maximization e