Astartup firm in a perfectly competitive market finds that its average total cost is higher than the market price. since the firm is incurring short-run losses, the management is debating whether to continue operations. alex ferguson, a senior manager, feels that this is a temporary phase and the firm should continue operations. which of the following, if true, would supportalex's argument?

a. the managers of the firm have worked for other firms that produced products with an even greater difference between average total cost and market price.

b. other firms in the same industry have higher labor costs but lower raw material costs.

c. the current price of the product covers the variable cost of production.

d. economic activity in recent months has been sluggish.

e. the price of the product is expected to remain stable over the coming months.

The larger the investment you make, the easier it will be to: get money from other sources. guarantee cash flow. buy insurance. streamline your products.

9. tax types: taxes are classified based on whether they are applied directly to income, called direct taxes, or to some other measurable performance characteristic of the firm, called indirect taxes. identify each of the following as a “direct tax,” an “indirect tax,” or something else: a. corporate income tax paid by a japanese subsidiary on its operating income b. royalties paid to saudi arabia for oil extracted and shipped to world markets c. interest received by a u.s. parent on bank deposits held in london d. interest received by a u.s. parent on a loan to a subsidiary in mexico e. principal repayment received by u.s. parent from belgium on a loan to a wholly owned subsidiary in belgium f. excise tax paid on cigarettes manufactured and sold within the united states g. property taxes paid on the corporate headquarters building in seattle h. a direct contribution to the international committee of the red cross for refugee relief i. deferred income tax, shown as a deduction on the u.s. parent’s consolidated income tax j. withholding taxes withheld by germany on dividends paid to a united kingdom parent corporation

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