Discuss why a company under a perfectly competitive market structure should continue to operate in the short=run price is at least equal to the average variable cost.
Discuss why a company under a perfectly competitive market structure should continue to operate in the...
. Discuss why a company under a perfectly competiive market structure should continue to operate in the short-run when price is at least equal to the average variable cost.
1) The farmer sells apples in a perfectly competitive market at a price of $1/pound. The farmer's marginal cost, average total cost, and average variable cost curve can be represented by the following MC price ATC AVC d-MR Should the farmer continue to operate in the short run? A) No B) Can't be determined using the information provided C) Yes
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.
In the short run, the perfectly competitive firm will continue to produce even though it might experience an economic loss if: a.total cost exceeds marginal cost. b.the market price exceeds the average variable cost. c.total revenue exceeds total costs. d.the market price exceeds the average fixed cost.
Name 1. Describe a perfectly competitive market structure in terms of number of firms, ease of entry a and product differentiation. 2. Draw the short-ran cost and revenue curves for a firm making an economic profit in a perfectly petitive industry. Show the firm's short-run supply curve. 3. Why might a firm continue to produce at a loss in the short na instead of shutting down? a perfectly competitive firm will make an economie profit in the short b. fP-...
XYZ company operates in a perfectly competitive market where the current market price is $10. Currently the firm is producing 200 units at an average variable cost of $8, an average total cost of $12 and a marginal cost of $10. a. Is the situation described above a short-run equilibrium for XYZ? Explain. b. What is XYZ’s profit/loss? c. What is XYZ’s producer surplus? d. Should XYZ continue to produce in this situation? Explain. e. Assuming that XYZ is ‘average’...
XYZ company operates in a perfectly competitive market where the current market price is $10. Currently, the firm is producing 200 units at an average variable cost of $8, and average total cost of $12 and a marginal cost of $10. (2) is the situation described above a short-run equilibrium for XYZ? Explain. (2) what is XYZ's profit loss? (2) What is XYZ's producer surplus? (2) Should XYZ continue to purchase in this situation? Explain (2) Assuming that XYZ is...
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...
Sonya and Leah operate a small firm in a perfectly competitive market, the diagram illustrates its MC, ATC, AVC and MR curves. 1. What is their current average revenue per unit? 2. What is their profit maximizing level of output and profit? 3. If the market clearing price drops to $10.00 per unit, should they continue to produce in the short run if they wish to maximize their economic profits (or minimize its economic losses)? Explain. 4. What is their...
The perfectly competitive market structure is considered to be economically efficient. Discuss why this is the case.