99-Year-Old Trucking Company Yellow Shuts Down

Yellow Corp., a 99-year-old trucking company that was once a dominant player in its field, halted operations Sunday, will lay off all 30,000 of its workers, and will file for bankruptcy. Yellow posted small profits in 2021 and 2022 and a $9.3 million loss in the first quarter of 2023.—cnn.com

Answer the following questions to check your understanding of the story.

1) Is Yellow’s decision to halt operations a short-run or a long-run decision?

Yellow ____________, which is a ____________ decision.

a) is exiting the market because it is incurring an economic loss; short-run

b) is making a temporary shutdown decision; long-run

c) is exiting the market because it can’t make an economic profit in the long run; long-run

d) is making a temporary shutdown decision; short-run

2) How will the remaining firms in the market respond to Yellow’s decision?

The remaining firms in the market will ____________.

a) increase shipments to a quantity at which marginal revenue exceeds marginal cost

b) increase shipments to the quantity at which marginal revenue equals marginal cost

c) make an economic profit in the long run

d) decrease shipments to the quantity at which marginal revenue equals marginal cost

99-Year-Old Trucking Company Yellow Shuts Down

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