With marginal cost , the price charged is equal to the opportunity cost to society of producing one more unit of the good. Hence, option(C) is correct.
With marginal cost pricing o all opportunity costs will be covered in the short run. o...
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....
On a short-run cost curve graph, if the market price, the marginal cost, and average total cost curve all intersect at one point, then what would that mean? Multiple Choice A- The business is making a high level of economic profit. B- The business has done an excellent job at cutting costs. C- The business is breaking even and the economic profit is either zero or very low. D- The business is ready for bankruptcy and we can definately say...
Which market structure can earn long-run economic profits? a. Perfect competition b. Monopolistic competition c. Oligopoly d. Monopoly e. c and d only All firms produce where a. marginal benefits are greater than marginal profits b. short-run profits are less than long-run profits c. marginal revenues are greater than or equal to marginal costs d. average total costs are greater than marginal costs A perfect competitor is a __________ and can earn economic profits ____________. a. price maker, in both...
The graph shows the marginal costs of chemical production. Cost (dollars per ton) Draw an arrow to show the marginal external cost of producing the 3rd ton of chemicals in a week. cost is the cost of producing an additional unit of a good O A. that falls on people other than the producer of the good O B. that is borne by the buyer of the good that falls on the entire society C, O D. that is borne...
Review of short-run profit maximization from microeconomic theory a) In the short-run, some input costs are . b) In the short-run, firms take fixed costs as . c) The revenue received from selling one additional unit of production is the . d) The cost of producing one additional unit of production is the . e) The profit maximizing quantity of production for a firm is the quantity where marginal revenue is marginal cost. f) In the short-run, the curve represents the firm’s supply curve.
1. Marginal cost pricing means that a firm charges Group of answer choices A price that is marginally lower than the average total cost of production. Any price as long as average total cost is greater than marginal cost. A price that is marginally higher than the average total cost of production A price that is equal to the marginal cost of production. 2. If the government wants a natural monopolist to achieve allocative efficiency, the government should Group of...
A profit-maximizing monopolist will continue expanding output as long as: o marginal revenue exceeds marginal cost. o marginal revenue is positive. o the cost of producing an additional unit exceeds the marginal revenue derived from the unit. o economic profit is more than zero.
Marginal cost is the opportunity cost of a good or service divided by the number of units produced. of a good or service that exceeds its benefit. that your activity imposes on someone else. that arises from producing one more unit of a good or service. The law of demand implies that demand curves shift leftward whenever the price rises. slope down. shift rightward whenever the price rises. slope up. If the United States can increase its production of automobiles...
Consider that the short-run production function for meat-packaging firm is q=20.5. If the marginal cost of producing the 10th unit is S5, then one can conclude that the wage per unit of laboris $0.05. O $0.25 cannot be determined without additional information $1.00
Price and cost (dollars per toy) The graph shows the short-run cost curves of a toy producer. Assume the toy producer is in a perfectly competitive market. If the market price of a toy is $11, then O A. The firm will break even. OB. The firm will lose an amount greater than its fixed costs. O C . The firm will lose an amount equal to its fixed costs. O D. The firm will lose an amount less than...