Homework Answers
Answer : For perfectly competitive firms the shutdown point is Price = Average variable cost. Here the price is $230,000 and the average variable cost is $180,000. As here the price is higher than the average variable cost hence in short-run, Bob should continue the production. But by continuing the production level Bob faces loss = Average total cost - Price = 460,000 - 230,000 = $230,000. So, in short-run due to continuing the production level Bob faces loss of $230,000.
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Bob is a general contractor in the construction industry. Suppose the construction industry is perfectly competitive....
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Question 4: Novotel Lotus provides catered meals, and the catered meals industry is perfectly competitive. Novotel...
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D Question 25 1 pts Price in a perfectly competitive industry is determined by each firm,...
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Please explain the process to solve these A firm in a perfectly competitive industry is producing...
Please explain the process to solve these
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November 5 1. Bob's Lawn-mowing service is a profit-maximizing competitive firm. Bob mows lawns for $30 each He mows 10 lawns a day (which, again, maximizes his profits). At this quantity, his total cost each day is $700, of which $600 is a fixed cost. (a) Calculate his profits. Show your work! (b) Should Bob shut down in the short run (say, tomorrow)?? Should Bob leavelexit the industry in the long run?? EXPLAIN
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D Question 25 1 pts Price in a perfectly competitive industry is determined by each firm, depending on its costs of production. O is indeterminate in the short run is always equal to marginal revenue for the firm. O must be greater than average total cost or the firm will shut down in the short run.
Duane breeds canary birds for a living. He operates in a perfectly competitive industry. Production costs for Duane are as follows: Output TVC MC AVC ATC 104 34.7 - maino 27.5 110 130 7 150 196 8 190 236 24 29.5 a. Presently, a canary sells for $37. How many birds should Duane breed per month? What are his profits or losses? b. Due to a change in demand, the price of canaries changes to $24. What is Duane's profit...
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Please explain the process to solve these
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