2. Under what conditions should a competitive firm shut down in the short run? Also show...
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...
To minimize losses in the short run, a perfectly competitive firm should shut down if… a. total revenue is less than total cost (TR < TC). b. total revenue is less than total fixed cost (TR < TFC). c. total revenue is less than the difference between total fixed cost and total variable cost (TR < TFC - TVC). d. total revenue is less than total variable cost (TR < TVC).
Explain how the perfectly competitive firm decides whether to operate or shut down in the short run.
In the short run, a perfectly competitive firm might earn negative economic profits and then decide to shut down. On a graph, show this situation, using marginal revenue, marginal cost, average-total-cost, and average-variable-cost curves. Indicate the level of output at which the firm will no longer produce. Explain why your graph shows the shut down point.
When do firms decide to shut down production in the short run under perfect competition? Explain carefully. The market for bread in Brooklyn, NY is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. Illustrate with the help of a graph how the individual firm maximizes profit in the short run.
8. A perfectly competitive firm is earning an economic profit. In the short run it should In the long run it should A. shut down; expand B. produce where MC = MR; leave the industry C. produce where MC = MR; expand production D. shut down; exit the industry 9. In the long-run equilibrium of a competitive market with identical firms, what is the relationship between price P, marginal cost MC, and average total cost ATC? A. P> MC and...
If a perfectly competitive firm faces a lower wage rate in the short run, what will happen? The firm’s short run maximum loss will fall The firm’s supply curve will shift up The firm’s shut down price will fall All of the answers are correct
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.
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....
Introduction to Microeconomics Deriving the Short-Run Supply Curve for the Perfectly Competitive Firm Cost $ 0 10 20 30 40 50 60 70 80 90 100 110 Outputs tunits) The figure illustrates the costs faced by a perfectly competitive firm. Use the figure to answer the following: 1) Based on the above, indicate on the graph, the short-run market supply curve for the perfectly competitive firm. 2) At what price will the firm shut-down? Will the firm leave the industry?...