The Equilibrium Price of a Guidebook Is $35 in the Perfectly

question 276

Multiple Choice

The equilibrium price of a guidebook is $35 in the perfectly competitive guidebook industry.Our firm produces 10 000 guidebooks for an average total cost of $38,a marginal cost of $30,and an average variable cost of $30.Our firm,in the short run,should:

• A) raise the price of guidebooks because the firm is losing money.
• B) keep output the same because the firm is producing at a minimum average variable cost.
• C) produce more guidebooks because the next guidebook produced will increase profit by $5.
• D) shut down because the firm is losing money.

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Definitions:

Collective Bargaining Model

A process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.

Bargaining Range

The spectrum of possible agreements in negotiation between the minimum acceptable offer and the maximum possible offer.

Bargaining Zone

Area within which the union and the employer are willing to concede when bargaining.

Canadian Labour Congress

A national trade union center in Canada, representing the interests of unionized workers.