Economics Questions and Answers

In a perfect competitive market, price discrimination occurs when identical goods and services are sold at different prices by the same provider. In pure price discrimination, the seller will charge the buyer the absolute maximum price that he is willing to pay.

A firm will choose to implement a shutdown of production when the revenue received from the sale of the goods or services produced cannot even cover the variable costs of production. In that situation, the firm will  experience a higher loss when it produces, compared to not producing at all. 

As long as price is above average variable costs, the firm should stay in business to minimize its losses in the short run.

No explanation has been provided for this answer.

Division of labour is immensely important in our economic system because it allows for work to be done much more quickly and efficiently than it would be without the division of labour. Division of labour is when tasks are split up into specialized separate tasks. it brings about increased output and while minimizing cost.

The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs.