“Even if a firm is losing money, it may be better to stay in business in the short run.” Is this statement ever true? Under what condition(s)?

Q: Should the firm shut down in the short-run?  Explain in detail why or why not.

A: The decision to shut down a firm in the short run depends on the comparison between the price and…

Q: Explain how short-run economic profits become long-run economic costs. When profits fall to zero,…

A: A stopwatch or a calendar cannot correctly identify the boundary between the short and long runs. It…

Q: What industry is the closest example you can think of to perfect competition, and why? What are its…

A: The market structure, which has numerous buyers and sellers, is perfect competition. The market…

Q: Should Tim want to maximize his profit in the short-run, how many t-shirts will he produce?

A: Given that the market structure is monopolistic competition, the profit maximizing condition is  MC=…

Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: The costs of production include both the fixed costs as well as the variable costs. The fixed costs…

Q: Write an essay on the theory of the firm

A: The theory of the firm, a microeconomic idea in neoclassical economics, asserts that a firm exists…

Q: Only typed answer  In a free-market system, imperfect competition involves

A: A free-market system that is also called a capitalist or market economy, refers to an economic…

Q: Why can't firms enter the market in the short-run?

A: There are various types of market structures which have different characteristics of the number of…

Q: I need to know where to start in Excel

A: Here is the process of setting up the Excel spreadsheet and creating the necessary charts with a…

Q: How much should a firm sell of a particular product in order to maximize profit? What factor does it…

A: A firm should maximize profits and bring in the output level, where there would equilibrium point…

Q: Why do a firm's profit disappear in the long run?

A: The firms operating in the long run, have to adjust and abide by the time frame which would allow…

Q: Small “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not…

A: “Mom and Pop firms” is a small independent business entity where the ownership and operations are…

Q: If you're a manager in a highly competitive business such where should you put your most effort to…

A: As a manager ,the primary responsibility is to look in the profits of the business. Business can be…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: When will a business shut-down in the short-run?

A: Short-run: - it is a short time period in which some factors of production are variable and some are…

Q: The graph shows the relevant curves for a profit maximizing monopolist. Assume that it is possible…

A:

Q: Describe the methods that can be used to to determine where profit is maximized?

A: A firm in short run and long run chooses to maximize its profits. Output levels of the firm are…

Q: What is the firms profit or loss?

A: Since the marginal revenue of the firm is above the average total cost and the marginal cost the…

Q: Why are abnormal profits of a firm difficult to sustain?

A: The abnormal profits under perfectly competitive market are difficult to sustain because of the free…

Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: Filling for bankruptcy does not mean that the firms have to shut down. In the US the bankruptcy laws…

Q: Can you give examples of companies with perfect competition?

A: The markets refer to the place where the buyers, and sellers interact. In the markets, the sellers…

Q: How does a firm decide whether to stay in business if it is earning a loss? Discuss in detail.

A: Profit maximizing level of output for a firm is at the point where its marginal revenue (MR) equals…

Q: Explain why a company would shut down in the short run.

A: The shut down point is the point at which a firm decides to seize its operations in the short run…

Q: You turned down a job at ABC Corp last year that would have paid you $125,000 per year and started…

A: Accounting Profit = Total Revenue - Explicit Cost  Economic Profit = Total Revenue - [Implicit Cost…

Q: year to rent the location and buy the merchandise. In addition, he would have to quit his $63000 per…

A: A economic benefit or loss isthe distinction between the income got from the offer of a yield and…

Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?

A: Answer - In the long run where the every input can vary and as in the long run where firms can make…

Q: Suppose that you want to open a new business or purchase an existing one. Describe that business.…

A: In general, a business refers to an organization or entity engaged in commercial, industrial, or…

Q: To compute economic profits, which costs are used?

A: The economic profits of a firm could be estimated by the difference between total revenue and total…