A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profit or minimize losses, the firm should: O produce more than 500 units. continue producing 500 units. shut down. Oproduce less than 500 units.

A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profit or minimize losses, the firm should: O produce more than 500 units. continue producing 500 units. shut down. Oproduce less than 500 units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For the perfectly competitive firm, economic profit equals: O (price minus average total cost) times quantity. O (price minus marginal cost) times quantity. O (price minus average variable cost) times quantity. total revenue minus total fixed cost.
Assume the following total cost schedule for a perfectly competitive firm. Output TVC (S) TFC ($) 100 1 40 100 2 70 100 3 120 100 180 100 250 100 6. 330 100 TABLE 9-1 Refer to Table 9-1. If the firm is producing at an output level of 6 units, the ATC is and the AVC is Select one: a. $71.67: $55 b. $38.33: $16.67 C $55: $16.67 d. $55: S80 e. $80: $55
A perfectly competitive, profit maximizing firm is producing a quantity such that AVC < MC < ATC. We know at that quantity: Group of answer choices ATC is falling but AVC is rising. Economic profit would decrease if the firm were to shut down. The firm is producing with economies of scale. All of the other choices are true.
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PQ 14.05 Reagan is a farmer and sells her wheat in a perfectly competitive market. Reagan produces 30,000 bushels of wheat for an average total cost of $7.50, marginal cost of $7.30, and average variable cost of $7.10. In the short-run, Reagan should produce more wheat if the current price is above, and should shut down if the current price is below Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $7.50; $7.30 $7.50; $7.10 $7.10; $7.30 $7.10; $7.00 e $7.30; $7.10 f $7.30; $7.00
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any letter; cannot be E
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Marginal revenue and marginal cost are same. This means that the firm is at minimum level of profit. True/False