8. The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each.At this level of output total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should:A. reduce output to about 80 units.B. expand its production.C. continue to produce 100 units.D. produce zero units of output. 5. Answer the question on the basis of the following data confronting a firm:Marginal MarginalCostOutput Revenue$16$1021631613416171621Refer to the data. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be:A. 2.B. 3.C. 4.D. 5.6. In the short run, a purely competitive firm will always make an economic profit if:A.P= ATC.B. P> AVC.C.P= MC.D. P> ATC.Please explain.7. A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firmshould:A shut down in the short run.B. produce because the resulting loss is less than its TFC.C. produce because it will realize an economic profit.D. liquidate its assets and go out of business.%3D

An ideal market system is referred to as perfect competition. There are no monopolies in a free…

8. The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should: A. reduce output to about 80 units. B. expand its production. C. continue to produce 100 units. D. produce zero units of output.

8. The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should: A. reduce output to about 80 units. B. expand its production. C. continue to produce 100 units. D. produce zero units of output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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