Question
A new smelter has the following characteristics: average total cost is $3400/ton at its capacity of 500 tons; the capital charge is $500,000 with a
A new smelter has the following characteristics: average total cost is $3400/ton at its capacity of 500 tons; the capital charge is $500,000 with a cost of capital of 5%. What is the entry price (price per ton) of this new smelter?
| A. | $5500 | |
| B. | $3450 | |
| C. | $3400 | |
| D. | $4400 |
There will be new entrants in the long run when the market price P is
| A. | Higher than entrants' FRATC. | |
| B. | Lower than entrants' FRATC. | |
| C. | Greater than entrants' ATC but lower than entrants' FRATC. | |
| D. | Lower than entrants' ATC. |
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Macroeconomics
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
6th Canadian Edition
321675606, 978-0321675606
