Suppose That at a Firm's Profit-Maximizing Level of Output, Its

question 143

Multiple Choice

Suppose that at a firm's profit-maximizing level of output, its total revenue is $1,250, the total cost of its variable factors of production is $1,000, and its total fixed cost is $500. This firm will ________ in the short run, and will ________ in the long run.

• A)shut down; reopen for business
• B)earn a profit; earn a loss
• C)earn a loss; earn a profit
• D)not shut down; exit the industry

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Definitions:

Ultra Vires

Acts performed by a corporation that are beyond the scope of its charter or legal authority.

Redress

The act of correcting a wrong or giving compensation for a harm done.

State of Incorporation

The specific state within the United States in which a company is legally registered to do business.

Statutory Close Corporation Supplement

A legal provision allowing a closely held corporation to operate with less formal procedures than are required of other corporations.