3. Consider the following diagram: ATC MC ive AVC P-D-MR Quartity Would a perfectly competitive firm facing these conditions stay in business in the short run? Demonstrate your answer on the graph by comparing the loss if it stayed open to the loss if it closed. Hint: don't forget that ATC- AVC AFC. 4. You own four firms that produce different products. The following table summarizes the conditions in each firm. First, calculate the missing numbers for each firm and fill in the table. AVC MC ATC Firm TC MR TR 200 20 1.5 100 32.5 200 70 10 8 Now, based on the table, match up each firm with one of the following four decisions (i) decrease output (ii) shut down (ii) increase output (iv) continue producing the same output level A: Principles of Microeconomics, p
3. Consider the following diagram: ATC MC ive AVC P-D-MR Quartity Would a perfectly competitive firm facing these conditions stay in business in the short run? Demonstrate your answer on the graph by comparing the loss if it stayed open to the loss if it closed. Hint: don't forget that ATC- AVC AFC. 4. You own four firms that produce different products. The following table summarizes the conditions in each firm. First, calculate the missing numbers for each firm and fill in the table. AVC MC ATC Firm TC MR TR 200 20 1.5 100 32.5 200 70 10 8 Now, based on the table, match up each firm with one of the following four decisions (i) decrease output (ii) shut down (ii) increase output (iv) continue producing the same output level A: Principles of Microeconomics, p
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:3. Consider the following diagram:
ATC
MC
ive
AVC
P-D-MR
Quartity
Would a perfectly competitive firm
facing these conditions stay in business in the short run? Demonstrate
your answer on the graph by comparing the loss if it stayed open to the loss if it closed. Hint: don't forget
that ATC- AVC AFC.
4. You own four firms that produce different products. The following table summarizes the conditions in
each firm. First, calculate the missing numbers for each firm and fill in the table.
AVC
MC
ATC
Firm
TC
MR
TR
200
20
1.5
100
32.5
200
70
10
8
Now, based on the table, match up each firm with one of the following four decisions
(i) decrease output
(ii) shut down
(ii) increase output
(iv) continue producing the same output level
A:
Principles of Microeconomics, p
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