If a Competitive Firm Is Operating in Short Run Equilibrium

question 31

Multiple Choice

If a competitive firm is operating in short run equilibrium and then its fixed costs fall by 40 percent, it should:

• A)use more labor and less capital in current production.
• B)not change its output.
• C)increase its output.
• D)decrease its output.
• E)stop producing.

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Definitions:

Pearson Correlation

A measure of the linear relationship between two quantitative continuous variables, ranging from -1 to 1, where 1 means a perfect positive correlation and -1 a perfect negative correlation.

Price Per Barrel

The cost of a barrel of goods, commonly used to denote the cost of a barrel of crude oil in financial markets.

Confidence Interval Estimate

A confidence interval estimate provides a range of values, derived from sample data, that is likely to contain the value of an unknown population parameter, along with a given level of confidence.

Prediction Interval

A range of values that is likely to contain the value of an unknown parameter for a future observation, with a specified level of confidence.