Homework Answers
8. C. It's total fixed cost
Reason :
In short run , if the loss is equal to average fixed cost when there is a shutdown because since there is no production , no variable cost is added while producing additional unit ( which is 0 in shutdown). Hence individual faces only losses equal to total fixed cost , i.e. the cost on setup and machinaries etc. Used for production.
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Bwhen a quin Shuts down it incurs a loss equal to : ai its average fixed...
Fixed costs are irrelevant in the decision about whether to shut down production in the short...
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....
e. we cannot calculate fixed cost If a firm shuts down in the short run and...
e. we cannot calculate fixed cost If a firm shuts down in the short run and produces no ousput, its b. 6. total cost will be e. d. e. equal to total variable cost equal to total fixed cost equal to explicit costs only impossible to calculate Exhibit 7-18 3/0 el $1 Q/t 10 7. In Exhibit 7-8, the vertical distance between lines B and C at any level of output represents a. marginal cost b. average total cost c....
Condé Nast shuts down Portfolio Condé Nast Publications launched its monthly business magazine Portfolio less than...
Condé Nast shuts down Portfolio Condé Nast Publications launched its monthly business magazine Portfolio less than two years ago. In late 2008, Condé Nast cut its payroll and advertising budgets by an average of 5 percent. Portfolio was hit with the biggest cuts. Recently, Condé Nast shut down Portfolio. Source: Wall Street Journal, April 28, 2009 Explain the effects of the payroll and advertising budget cuts on Condé Nast's loss in the short run. Why did Condé Nast shut down...
A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000...
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?
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice...
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice O is equal to its total variable costs. O O ь is zero. гето. O is equal to its total fixed costs. cannot be determined. Refer to the diagrams, which show the demand and cost curves for a perfectly competitive firm producing output and the demand and supply curve for the industry in which it operates. Which of the following is correct? ATC AVC...
Are they both correct In the short run, a firm shuts down if price is less...
Are they both correct
In the short run, a firm shuts down if price is less than average total cost. O True O False D | Question 2 2 pts Price discrimination by a monopolist can decrease deadweight loss compared to a non-price discriminating monopolist. O True O False
2. A profit-maximizing business incurs an economic loss of S30,000 per month. Its fixed cost is...
2. A profit-maximizing business incurs an economic loss of S30,000 per month. Its fixed cost is S20,000 per month. a) Should this firm produce or shut down in the short run? Explain. Should it stay in the industry or exit in the long run? Explain. b) Suppose instead that this business has a fixed cost of S35,000 per month. Should it produce or shut down in the short run? Explain. Should it stay in the industry or exit in the...
Suppose a perfectly Competitive firms minimum average variable cost is $1 when it produces 50. If...
Suppose a perfectly Competitive firms minimum average variable cost is $1 when it produces 50. If the price is $2 and the firm's marginal cost is $2 the firm should Continue to produce, but produce less than 50 Continue to operate, but produce more than 50 Shut down Continue to produce 50 To maximize economic profit of perfectly competitive firm: will sell its goods below the market price all of the above will sell its goods above the market price...
QUESTION 3 When average total cost is at its minimum: a. marginal cost is equal to...
QUESTION 3 When average total cost is at its minimum: a. marginal cost is equal to average total cost b. average variable cost plus average fixed cost is declining with increases in output c. marginal cost is equal to average variable cost d. average total cost is equal to average variable cost e. average variable cost is declining with increases in output
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 o...
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...
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....
e. we cannot calculate fixed cost If a firm shuts down in the short run and produces no ousput, its b. 6. total cost will be e. d. e. equal to total variable cost equal to total fixed cost equal to explicit costs only impossible to calculate Exhibit 7-18 3/0 el $1 Q/t 10 7. In Exhibit 7-8, the vertical distance between lines B and C at any level of output represents a. marginal cost b. average total cost c....
Condé Nast shuts down Portfolio Condé Nast Publications launched its monthly business magazine Portfolio less than two years ago. In late 2008, Condé Nast cut its payroll and advertising budgets by an average of 5 percent. Portfolio was hit with the biggest cuts. Recently, Condé Nast shut down Portfolio. Source: Wall Street Journal, April 28, 2009 Explain the effects of the payroll and advertising budget cuts on Condé Nast's loss in the short run. Why did Condé Nast shut down...
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice O is equal to its total variable costs. O O ь is zero. гето. O is equal to its total fixed costs. cannot be determined. Refer to the diagrams, which show the demand and cost curves for a perfectly competitive firm producing output and the demand and supply curve for the industry in which it operates. Which of the following is correct? ATC AVC...
Are they both correct
In the short run, a firm shuts down if price is less than average total cost. O True O False D | Question 2 2 pts Price discrimination by a monopolist can decrease deadweight loss compared to a non-price discriminating monopolist. O True O False
2. A profit-maximizing business incurs an economic loss of S30,000 per month. Its fixed cost is S20,000 per month. a) Should this firm produce or shut down in the short run? Explain. Should it stay in the industry or exit in the long run? Explain. b) Suppose instead that this business has a fixed cost of S35,000 per month. Should it produce or shut down in the short run? Explain. Should it stay in the industry or exit in the...
QUESTION 3 When average total cost is at its minimum: a. marginal cost is equal to average total cost b. average variable cost plus average fixed cost is declining with increases in output c. marginal cost is equal to average variable cost d. average total cost is equal to average variable cost e. average variable cost is declining with increases in output
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