Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price.Assuming price exceeds average variable cost, to maximize profits Cathy's shouldO a. stop producing since it is earning a loss.O b. decrease their output.Oc make no adjustments as they are already maximizing their profits.Od. increase their output.Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factoryis producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each producesmore, the costs of Kyle's factory will exceed those of Stan's factory.Ob.more, their costs will be equal.less, the costs of Kyle's factory will exceed those of Stan's factory.Od.less, their costs will be equal.If a firm is producing where MR > MCthe revenue gained by producing one more unit of output is less than the cost incurred by doing so.Ob.the firm is already maximizing profits because revenue is being increased by more than costs.Oc.the revenue gained by producing one more unit of output ekveeds the cost incurred by doing so.Od.the revenue gained by producing one more unit of output equals the cost incurred by doing so.If a firm shuts down in the short run, thenO a.its economic profits are zero.O b. it must be the case that its revenues from operating were less than its total costs.О.its losses are equal to its fixed costs.Od.its fixed costs are greater than its variable costs.

In perfect competition at equilibrium, P = MC When MC exceeds the price, it is not the efficient…

Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. Ob. decrease their output. Oc make no adjustments as they are already maximizing their profits. O d. increase their output.

Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. Ob. decrease their output. Oc make no adjustments as they are already maximizing their profits. O d. increase their 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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33 The table shows the total costs for a perfectly competitive firm, If the firm shuts down in the short run, the total cost will be: Output Total cost $2,500 2,700 2. 3,100 3. 3,700 4,500 5. 6,000 Select one: Oa. $2,700. O b. $200. O c. $2,500. O d. $1,500.
Consider the figure. At the price of $3, the firm's short run decision should be to O A. continue producing, since this is a break-even price. OB. stop producing, since variable costs cannot be covered. OC. exit the market. OD. stop producing, since it is losing exactly all its fixed costs. O E. continue producing, even though it will make a loss. Price ($) Output MC ATC AVC
Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 4 13 12 10 14 8 6 4 2 MC 1 2 3 QUANTITY ATC AVC 5 Refer to Figure 14-1. If the market price is $5, the firm will earn a. negative economic profits in the short run but remain in business. b. negative economic profits and shut down. c. zero economic profits in the short run. O d. positive economic profits in the short run.
A perfectly competitive firm is producing at the point where its marginal cost equals the price of the product. If it increasese its ouput, its total revenue will a. fall and its profits will rise. b. rise and its profits will fall. c. fall and its profits will fall. d. rise and its profits will rise.
The industry in the figure below consists of many firms with identical cost structures, and the industry experiences constant scale. Consider a change in demand from D₁ to D2, which increases price from $20 to $30 in the short run. Price $50 $40 $30 $20 $10 0 10 20 Market 30 D₁ 40 Quantity S₁ D₂ 50 60 70 Tools LRS O S₂ Instructions: Enter your answers as a whole number. a. Draw the new short-run market supply curve that will occur in response to the increase in demand and increase in price. Instructions: Use the tool provided 'S2' and be sure your supply curve includes the new equilibrium price and quantity. b. Draw the long-run supply curve. Instructions: Use the tool provided 'LRS' and plot only the endpoints over the entire range of output (0-60). The new equilibrium price is $ 20 and the new equilibrium quantity is 40.
Refer to Figure 12-10. If the price is less than $6, the firm should short run and in the long run. OA. shut down; exit the market OB. continue operating, stay in the market and expand OC. continue operating; exit the market OD. exit the market; exit the market in the Revenue and cost (dollars per unit) $20 11 10 6 0 J 200 250 300 ATC AVC MR Quantity
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Last answer was wrong. Don't give incorrect answers plz
Consider the figure. At the price of $6, the firm's short-run decision should be to A. exit the market. B. decrease production. C. continue producing because it is making a positive profit. O D. stop producing because variable costs cannot be covered. Dollars per Unit $6 Output MC ATC AVC Q
The company XYZ produces chairs and its costs are given in the table below. Variable Quantity Total Costs Variable Costs Fixed Costs Value 30 $3,600 $2,400 $1,200 In the short run, should this company shut down if the price of the chair is $95/unit? a. Yes, because the average total cost is higher than the price. b. Yes, because the average variable cost is higher than the price. O c. No, because the average total cost is higher than the price. d. No, because the average variable cost is lower than the price.
Brody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.-Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer. -At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work. -Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200. -Brody's profit-maximizing quantity of saxophones -Brody's loss, completely shaded Quantity Total Variable cost 6 $120 7 $145 8 $165 9 $220 10 $290 11 $390
In the short run, profits when a competitive firm shuts down are-$8200, and they are -$350 when the firm continues to produce. This firm will minimize losses in the short run by Choose one: A. either shutting down or continuing to produce. O B. continuing to produce. O C. shutting down.