A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. At what price would the firm consider shutting down in the short run? a. $10 b. $25 c. $65 d. $70

A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. At what price would the firm consider shutting down in the short run? a. $10 b. $25 c. $65 d. $70

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. At what price would the firm consider shutting down in the short run?

$10

$25

$65

$70

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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Typed plz and asap please provide me a quality solution for better rating and take care of plagiarism also do all or do nothing
Draw and describe a diagram representing the cost curves – MC, AC, and AVC – for a profit-maximizing firm under perfect competition. Show U-shaped AC and AVC curves. Label the breakeven and shut down prices. Also, show a price between the breakeven and shut down prices and explain how the firm decides on its profit-maximizing/loss-minimizing output level at that price and show how the amount of profit or loss can be shown in the diagram. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Consider the figure below displaying the cost curves of a competitive firm. In the SHORT-run, at p₁ the firm will at p2 the firm will at på the firm will and at p4 the firm will $ P1 P2 P3 P4 ‒‒‒‒‒‒ 91 92 93 94 MC AC AVC 95 A. make normal profit; make no profit; make losses; exit B. make losses; makes supernormal profit; make normal profit; make losses C. make supernormal profit; make normal profit; make losses; shut down D. exit; make normal profit; enter; shut down E. always make some profit
Problems: Question #6: The Phantom Farms bakery produces pumpkin pies according to the following short run cost schedules. Assume the pumpkin pie industry is perfectly competitive and that the bakery can only produce and sell whole pies. AVC = ATC = MC = Quantity (pies) TFC = total TVC = total TC = total fixed cost variable cost average average total marginal cost variable cost cost cost (i) same as (i) 1 14 18 14.0 18 14 2 same as (i) (ii) 28 12.0 14 10 3 same as (i) 38 42 12.7 (v) 14 4 same as (i) 60 (iii) 15.0 16 22 same as (i) 86 90 17.2 18 (vi) same as (i) 116 120 (iv) 20 30 Fill in the five missing cost numbers indicated in the table above. (i) (ii) (iii) (iv) (v) (vi) If the price of pumpkin pies is $22 per pie, how many pies should Phantom Farms produce in the short run? What profit or loss does the firm earn? Explain how you arrived at this answer. Illustrate Phantom Farms' choice with a graph and indicate profits or losses. 3
True or False