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

See similar textbooks

Similar questions

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
Give detail answer
In the long run, a perfectly competitive firm will earn a negative market return. a positive profit. a loss. a normal profit. O excess profit.
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
any letter; cannot be E
A perfectly competitive firm faces the short-run cost schedule shown in Table 1. A) Assume market price declines to £9 per unit. If the firm’s average variable cost is £9.5, should the firm shut down in the short run? In the long run? Explain. B) If the firm is typical of other firms, what price will it charge in the long run? Explain.
Marginal revenue and marginal cost are same. This means that the firm is at minimum level of profit. True/False
Given the table below for a firm operating in a perfectly competitive market, what is the short run fixed cost? Output 0 1 2 3 $20 $10 $12 Total Cost $10 $20 $28 $34 Cannot be determined
Table Cost.EX2.2: Data for a Competitive Firm Marginal Marginal Output Cost Revenue (Q) (MC) (MR) 10 $3.00 $4.00 11 $3.50 $4.00 12 $4.00 $4.00 13 $4.50 $4.00 14 $5.00 $4.00 15 $5.50 $4.00 16 $6.00 $4.00 Refer to Table Cost.EX2.2. If the firm wishes to maximize profit, it should produce units. O 10 O 12 O 11 6.
Mo owns a Coffee truck which operates in a perfectly competitive industry. He faces the following cost schedule (notice that his coffee maker makes ten cups at a time, and that he has a daily fixed cost of operating the truck). If the market price of a cup of coffee is $2.50, and he is producing at a profit maximizing level Q*, calculate his profit. (Hint: compute MR and MC to find Q*) Q TC 0 $30 10 $50 20 $63 30 $73 40 $78 50 $95 60 $120 Select one: a. $45 b. $30 c. $35 d. $15 e. $0 Clear my choice