Fill in the blank with the correct answer. In the short run, if a firm is...
Fill in the blank with the correct answer. In the short run, if a firm is having economic losses, but the profit is greater than the average variable cost, then the firm should ____________.
Homework Answers
Answer
Continue o produce in the short run to minimize losses.
A firm shutdown if the losses are above fixed-cost because even firm shutdown there is losses equal to fixed cost.
losses if firm run when AVC<P<ATC
losses =FC+(AVC-P)*Q
where AVC<P, so the losses is smaller than FC
when P<AVC then
losses =FC+(AVC-P)*Q but here P<AVC, so the losses is higher than FC.
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Fill in the blank with the correct answer. In the short run, if
a firm is...
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...
A perfectly competitive firm will earn a profit in the short run when it produces the...
A perfectly competitive firm will earn a profit in the short run when it produces the profit-maximizing quantity of output and the price is: 1) greater than marginal cost. 2) less than marginal cost. 3) less than average variable cost. 4) greater than average total cost.
A firm will continue to operate in the long run only if: it earns a positive...
A firm will continue to operate in the long run only if: it earns a positive rate of return. it earns a nonnegative economic profit. it makes a positive accounting profit. average cost exceeds price. the average variable cost exceeds price. A profit-maximizing firm should shut down in the short run if: price is greater than marginal cost. total revenue is less than total variable cost. the firm is earning less than a normal rate of return. the firm is...
In the short run, a perfectly competitive firm produces output using capital services (a fixed input)...
In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input). At its profit-maximizing level of output, the marginal product of labour is equal to the average product of labour. a. What is the relationship between this firm's average variable cost and its marginal cost? O Average variable cost is higher than marginal cost O Average variable cost equals marginal cost O Average variable cost is less than marginal...
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....
Question 21 4 pts In the short run, a firm will stay in business as long...
Question 21 4 pts In the short run, a firm will stay in business as long as: o marginal revenue is greater than or equal to marginal cost O price equals average revenue Oprice exceeds average variable cost. O price is less than average variable cost Question 22 4 pts The point of maximum profit for a business firm is where: PEATC OTRETC TR=MR OMR = MC
SHOW ALL WORK A profit-maximizing firm in the short run has total fixed costs of $200....
SHOW ALL WORK A profit-maximizing firm in the short run has total fixed costs of $200. Its variable costs are as below. Output Total Variable Cost 0 $0 1 $190 2 $360 3 $510 4 $650 5 $800 6 $990 7 $1,190 8 $1,420 9 $1,770 10 $2,170 (A) (3 pts.) Calculate average total cost when output is 5 units....
Thanks in advance 4) Explain why a firm should continue to operate in the short run...
Thanks in advance
4) Explain why a firm should continue to operate in the short run so long as market price is greater the firm's average variable cost at the profit-maximizing level of output.
Please indicate the correct answer and why. Thank you! The graph shows the short-run cost curves...
Please indicate the correct answer and why. Thank you!
The graph shows the short-run cost curves of a toy producer. The market has 1,000 identical toy producers. The market price of a toy is $21 In the short run, the firm produces toys a week. The firm Price and cost (dollars per toy) 27 MC in the short run. 21 18- makes zero economic profit makes a positive economic profit incurs an economic loss ATC AVC 1000 1500 2000 2500...
Exhibit 12-2 Short Run Morginal Cost Average $105---- Total $88------ Cost Average Variable $55 - Cost...
Exhibit 12-2 Short Run Morginal Cost Average $105---- Total $88------ Cost Average Variable $55 - Cost 460 1675 600 Refer to Exhibit 12-2. Suppose the market price equals $88 and the firm is currently producing 600 units of output. In this situation, the firm: is maximizing profit. should increase production of output in order to maximize profit. should decrease production of output in order to maximize profit. should shut down in order to minimize economic losses.
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...
In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input). At its profit-maximizing level of output, the marginal product of labour is equal to the average product of labour. a. What is the relationship between this firm's average variable cost and its marginal cost? O Average variable cost is higher than marginal cost O Average variable cost equals marginal cost O Average variable cost is less than marginal...
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....
Question 21 4 pts In the short run, a firm will stay in business as long as: o marginal revenue is greater than or equal to marginal cost O price equals average revenue Oprice exceeds average variable cost. O price is less than average variable cost Question 22 4 pts The point of maximum profit for a business firm is where: PEATC OTRETC TR=MR OMR = MC
Thanks in advance
4) Explain why a firm should continue to operate in the short run so long as market price is greater the firm's average variable cost at the profit-maximizing level of output.
Please indicate the correct answer and why. Thank you!
The graph shows the short-run cost curves of a toy producer. The market has 1,000 identical toy producers. The market price of a toy is $21 In the short run, the firm produces toys a week. The firm Price and cost (dollars per toy) 27 MC in the short run. 21 18- makes zero economic profit makes a positive economic profit incurs an economic loss ATC AVC 1000 1500 2000 2500...
Exhibit 12-2 Short Run Morginal Cost Average $105---- Total $88------ Cost Average Variable $55 - Cost 460 1675 600 Refer to Exhibit 12-2. Suppose the market price equals $88 and the firm is currently producing 600 units of output. In this situation, the firm: is maximizing profit. should increase production of output in order to maximize profit. should decrease production of output in order to maximize profit. should shut down in order to minimize economic losses.
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