To minimize losses in the short run, a perfectly competitive firm should shut down if… a....
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).
Homework Answers
Answer
Option
d. total revenue is less than total variable cost (TR < TVC)
==
A perfectly competitive firm maximizes profit at MC=P if the P>AVC or TR>TVC
A firm should shut down if it is not covering all the variable costs to reduces losses to fixed cost levels.
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To minimize losses in the short run, a perfectly competitive
firm should shut down if…
a....
8. In the short run, a perfectly competitive firm will shut down if it is producing...
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...
QUESTION 31 at all positive output levels. In the short run, a perfectly competitive firm will...
QUESTION 31 at all positive output levels. In the short run, a perfectly competitive firm will always shut down if total revenue is a. less than total cost but greater than variable cost b. less than variable cost c. less than total cost but greater than fixed cost d. greater than fixed cost
20. Which of the following statements is not a characteristic of a perfectly competitive firm? a....
20. Which of the following statements is not a characteristic of a perfectly competitive firm? a. Perfectly competitive firms view each other as fierce rivals. b. Firms are price-takers. c. All firms produce a homogeneous product. d. Perfectly competitive markets allow freedom of entry and exit. 21. Since the firm’s demand curve is perfectly elastic for a price-taking firm, a. P = MR. b. P = MRP. c. P = TR. d. both a and b. e. both a and...
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....
A firm will shut down in the short run if the total revenue that it would...
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.
cardboard boxes are produced in a perfectly competitive market. each identical firm has a short run...
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
8. A perfectly competitive firm is earning an economic profit. In the short run it should...
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...
A firm should not necessarily shut down if: Select one: a. firms suffer losses and the...
A firm should not necessarily shut down if: Select one: a. firms suffer losses and the price is below variable costs. b. price is less than average variable cost. C. total revenue is less than total variable cost. d. firms suffer losses and the price is above variable costs. e. the demand curve facing the firm lies below its average variable cost curve. Previous page 4 5 o 6
Please answer it with in 20 mins plz e3(t0 marks): The graph below shows the cost...
Please answer it with in 20 mins plz
e3(t0 marks): The graph below shows the cost curves of a perfectly competitive firm. ATC MR Quantity (units (a) What is the market price? Why? ( 1 mark) (b) What is the equilibrium (profit maximizing) level of output of the firm? Why? (I mark) (c) What is the average fixed cost (AFC) at equilbrium? (I mark) (d) What is total revenue (TR), total fived cost (TFC), total variable cost (TVC), and total...
In the short run, a perfectly competitive firm might earn negative economic profits and then decide...
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.
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...
QUESTION 31 at all positive output levels. In the short run, a perfectly competitive firm will always shut down if total revenue is a. less than total cost but greater than variable cost b. less than variable cost c. less than total cost but greater than fixed cost d. greater than fixed cost
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....
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
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...
A firm should not necessarily shut down if: Select one: a. firms suffer losses and the price is below variable costs. b. price is less than average variable cost. C. total revenue is less than total variable cost. d. firms suffer losses and the price is above variable costs. e. the demand curve facing the firm lies below its average variable cost curve. Previous page 4 5 o 6
Please answer it with in 20 mins plz
e3(t0 marks): The graph below shows the cost curves of a perfectly competitive firm. ATC MR Quantity (units (a) What is the market price? Why? ( 1 mark) (b) What is the equilibrium (profit maximizing) level of output of the firm? Why? (I mark) (c) What is the average fixed cost (AFC) at equilbrium? (I mark) (d) What is total revenue (TR), total fived cost (TFC), total variable cost (TVC), and total...
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