5. A fimi must pay a cost of entry of $1000. The firm is in the long run, and can decide to avoid paying this cost by producing 0 and exiting the market if it wants to. It can produce up to 5 units of a good. The variable costs of producing units 1 to 5 are $40, $80, $120, $160, and $200, respectively. The market price of the good is $100. What should the firm do in this situation? Produce O units. Produce 1 unit. Produce 2 units. O Produce 3 units Produce 4 units O Produce 5 units 6. At the current market price, producing the quantity that maximizes profil would result in a loss of $4,000. The fim's fixed cost is $3,500. What should the firm do in the short run? O Produce the quantity that maximizes profil, even though doing so would resuit in a ioss. O Shut down production since producing the quandity that maximizes proit would resut in a losa that is bigger than its fixed cost. Produce more than the quantity that maximizos profit since the profic-maximizing quantity would result in a loss. O Produce less than the quantity that maximizes profit (but not shut down production fully) since the profit-maximiring quantity would result in a loss.
5. A fimi must pay a cost of entry of $1000. The firm is in the long run, and can decide to avoid paying this cost by producing 0 and exiting the market if it wants to. It can produce up to 5 units of a good. The variable costs of producing units 1 to 5 are $40, $80, $120, $160, and $200, respectively. The market price of the good is $100. What should the firm do in this situation? Produce O units. Produce 1 unit. Produce 2 units. O Produce 3 units Produce 4 units O Produce 5 units 6. At the current market price, producing the quantity that maximizes profil would result in a loss of $4,000. The fim's fixed cost is $3,500. What should the firm do in the short run? O Produce the quantity that maximizes profil, even though doing so would resuit in a ioss. O Shut down production since producing the quandity that maximizes proit would resut in a losa that is bigger than its fixed cost. Produce more than the quantity that maximizos profit since the profic-maximizing quantity would result in a loss. O Produce less than the quantity that maximizes profit (but not shut down production fully) since the profit-maximiring quantity would result in a loss.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 7PA
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