Q1
ANswer
Option 3
A firm makes a loss equal to fixed cost if it shut down so the
firm should shut down if the losses are above the fixed cost
here the loss is below fixed cost so the firm should not stop
production
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Q2
Answer
Option 1
Here, the losses are above fixed cost so the firm should shut down
and reduce losses to $200
A firm is seeing a $500 loss in the short run. The fixed cost of operation...
16. A firm is seeing a $500 loss in the short run. The fixed cost of operation for this firm is $200. What is the best decision for this firm in the short run? This firm should shut down production immediately There is not enough information provided to answer. This firm should not shut down production in the short run. This firm should produce more than what it is currently producing.
D 15. A firm is seeing a $500 loss in the short run. The fixed cost of operation for this firm is $1,000. What is the best decision for this firm in the short run? This firm should shut down production immediately. This firm should produce more than what it is currently producing. This firm should not shut down production in the short run. There is not enough information provided to answer.
11. A firm sells 30 units of its product at a price of $5 per unit. It incurs a fixed cost of $100 and a variable cost of $20. The firm's profit is ________. a. $50 b. $100 c. $150 d. $30 15. A firm is seeing a $500 loss in the short run. The fixed cost of operation for this firm is $1,000. What is the best decision for this firm in the short run? a. This firm should...
A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a year. Should the firm produce or shut down in the short run. Suppose instead that the firm has a fixed cost of $35,000 per year. Should the firm produce or shut down in the short run?
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
Consider a firm that has short-run AVC of $1.50 and short-run AFC of $1. If the firm can charge a price of $1.75 per unit sold then the firm should produce in both the SR and the LR produce in the SR but not the LR exit shut down
QUESTION 21 Assume a competitive firm faces a market price of $90. The total cost of the firm is given by 1 Q3 +9Q+ 1250. c- Which of the following is true in the short-run situation? [Hint: First calculate the profit-maximizing quantity and price, and then calculate the profit. If t O The firm makes profit of more than $500 O The firm makes a loss of $764 and should shut down OThe firm breaks even he firm makes a...
4. Your company sells Beyonce concert DVDs. Total fixed costs for your operation are $10,000 a year. The variable costs are: 500-Q2 (Q is in hundreds) The firm pays $500 a year in various taxes. The market price of these DVDS is $40. Beyonce has many fans. Show your work/thought process: a. Should the firm shut down in the short run? Explain. If the firm's fixed costs decreased from $10,000 to $8,000, would the firm shut down in the b....
A firm will shut down in the short run if the total revenue that it would get from producing and selling its output is less than its a. fixed costs. b. opportunity costs. c. total costs. d. variable costs.