Is it ever better for a perfectly competitive firm to produce output even when it is losing money? If so, when?
The firm in a perfectly competitive market will keep producing when the market price it charges is greater than the minimum average variable cost in the short run.
In the short run, only variable cost matters as the fixed cost are considered as sunk costs. When the firm is able to recover its variable costs, the firm will minimize its losses by keep producing as the losses from shutting down would be greater than losses from keep producing.
Is it ever better for a perfectly competitive firm to produce output even when it is...
Under what circumstances would a perfectly competitive firm continue to produce even when it is losing money? Why would this be better than shutting down?
When the price of a perfectly competitive firm's output rises: a. the firm will produce less. b. the firm will produce more. c. the firm's marginal cost curve will shift to the left. d. the firm's marginal cost curve will shift to the right.
A perfectly competitive firm will be willing to produce even at a loss in the short run, as long as Multiple Choice the loss is smaller than its marginal costs the loss is smaller than its total variable costs. price exceeds marginal costs. O the loss is smaller than its total fixed costs.
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is perfectly vertical. maybe downward or upward sloping, depending upon the type of product offered for sale. In the short run, the best policy for a perfectly competitive firm is to Question 17 options: shut down its operation if the price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its...
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.
The 3 conditions of a perfectly competitive firm when it makes a profit, breaks even, loss?
3. A firm in a perfectly competitive market will produce no output in the short run if the price is below $18 but will produce if the price is above $18. The smallest quantity they will produce in the short run is 8. Firms will earn 0 economic profit if the price is $74 and its profit maximizing quantity is 12 at that price. The firm’s fixed cost is $576. Assume the good can be produced in continuous quantities. Draw...
The profit-maximizing (or loss-minimizing) perfectly competitive firm will want to produce the quantity of output at which the difference between MR and MC is greatest, DO you agree or disagree with this statement? Explain your answer, Would be greatly appreciated answered in 5sentences by your own, not copy and pasted please.
Suppose a perfectly competitive firm faces this situation: P= $15, output = 700, MC = $14, AVC = $10, and ATC = $14. Which statement is correct? O O O O The firm is productively but not allocatively efficient. The firm is allocatively efficient but not productively efficient. The firm is both productively and allocatively efficient. The firm is neither allocatively efficient nor productively efficient. Suppose that the twenty-third worker generates a marginal product equal to eight boxes of output...
The market for tomatoes is perfectly competitive. The equilibrium price in the market is $4.60/kg. When Tom the tomato farmer produces 10,000kg he has an average total cost of $5/kg, a marginal cost of $4.20/kg, and an average variable cost of $4.20/kg. In the short run Tom should: Select one: a. shut down, because he is losing money. b. produce more tomatoes, because that will increase his profit. c. raise the price of tomatoes, because he is losing money. d....