The answer is option D- is earning a positive economic profit.
A change in the market price in the short term induces the profit-maximizing company to change its optimum output level. This optimal output occurs if the price is equal to the marginal cost, provided that the marginal cost exceeds the average variable cost. The company's supply curve is therefore the marginal cost curve, higher than average variable cost. (When the price falls below the average variable cost, the company will shut down.) In the long run, the company will adjust its inputs to the same long-run marginal cost as the market price. It functions on a short-run marginal cost curve at this level of output where the short-run marginal cost is the same as the value.
QUESTION 4 If the price of a product consistently exceeds its average cost, one can definitely conclude that the firm:...
If marginal cost for a firm exceeds marginal revenue, what can be said about the firm? Select one: O a. It should increase the level of production to maximize its profit. O b. It must be experiencing losses. O c. It is most likely to be at a profit-maximizing level of output. O d. It may still be earning a profit.
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...
(Click to select) economies of scale a. Long-run average total cost falls as the firm realize: rises when the firm experiences [ (Click to select) diseconomies of scale diminishing marginal returns increasing marginal returns b. The minimum efficient scale is the level of output produced by the smallest firm in the industry. smallest level of output at which a firm can produce. only level of output where long-run average total costs are minimized. smallest level of output needed to attain...
Help with 14-16 please.
14. A Monopoly: A. Will realize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of output. B. Will realize an economic profit if ATC exceeds MR at the profit-maximizing/loss-minimizing level of output c. Will realize an economic loss if MC intersects the down-sloping portion of MR D. Always realizes an economic profit. MC ATC AVC 15. At equilibrium, the profit-maximizing monopolist facing the situation shown in the graph above will face: A. Average...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of output. b. is always equal to or greater than short-run average total cost. c. can be measured in the short-run. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then a long-run marginal cost is at its minimum point b. long run average cost is at its minimum point. c long...
If firms are producing at a profit-maximizing level of output where the price exceeds average total cost: O other forms will enter the market. Oeconomic profits must be positive. accounting profits must be positive. All of these are true.
ecou 19_ECON2113P03-2010-13768 A firm whose price is below its average cost: Select one: is earning positive economic profit. O b. is earning zero accounting profit. c. is earning negative economic profit. O d. is earning zero economic profit. is just breaking even. page
5) Perfect Competition III The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a firm are shown in the figure to the right. The market price is $10. a. What is the firm's profit-maximizing output level? b. Will the firm produce in the short-run? Why or why not? c. If the firm is producing in the short-run, is it earning a profit [yes, no, or N/A]? What is the firm's profit or loss per unit? d. What is the firm's...
QUESTION 1 Which of the following is not a characteristic of the monopolistic competition market structure? Many sellers, each small in size relative to the overall market. Few sellers. Differentiated product. Easy, low-cost entry and exit. QUESTION 2 Which of the following is the best example of a monopolistic competitor? Wheat farmers. Restaurants. Air Canada. General Motors. QUESTION 3 In the long run, both monopolistic competition and perfect competition result in: a wide variety of brand-name choices for consumers. an...
A profit-maximizing monopolist will continue expanding output as long as: o marginal revenue exceeds marginal cost. o marginal revenue is positive. o the cost of producing an additional unit exceeds the marginal revenue derived from the unit. o economic profit is more than zero.