If Mattie wants to discourage Irene from entering the market, what strategy should she follow?
a. Threaten to always accommodate
b. Always accommodate
c. Threaten to always fight
d. All of the above
QUESTION 2A firm sells 1000 units per week. It charges 15 per unit, the average variable costs are 10, and the average costs are 25 . In the long run, the firm should
a. Shut-down as the firm is making a loss of 10,000 per week
b. Shut-down as price is lower than average cost
c. Continue operating as the firm is covering all the variable costs and some of the fixed costs
d. Shut-down because it is cost effective to pay off the remaining fixed costs
QUESTION 3What would be the profits for Irene's Dairy in equilibrium?
a. 5 million loss
b. 5 million
c. 10 million
d. 20 million
QUESTION 4A firm sells 1000 units per week. It charges 15 per unit, the average variable costs are 10, and the average costs are 25 . In the short run, the firm should
a. Shut-down as the firm is making a loss of 10,000 per week
b. Shut-down as price is lower than average cost
c. Continue operating as the firm is covering all the variable costs and some of the fixed costs
d. Shut-down because it is cost effective to pay off the remaining fixed costs
QUESTION 5What would be the profits for Mattie's Dairy in equilibrium if Irene does enter the market?
a. 5 million loss
b. 5 million
c. 10 million
d. 20 million
QUESTION 6A firm sells 1000 units per week. It charges 70 per unit, the average variable costs are 25, and the average costs are 65 . At what price would the firm consider shutting down in the long run?
a. 10
b. 25
c. 65
d. 70
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