Refer to Figure #1. The firm will shut down temporarily if it realizes that the market price is between P2 and P3. Under such circumstance, the firm O has to pay neither its variable costs nor its fixed costs O still has to pay its fixed costs, but not its variable costs O still has to pay both its variable costs and its fixed costs O still has to pay its variable costs, but not its fixed costs

Refer to Figure #1. The firm will shut down temporarily if it realizes that the market price is between P2 and P3. Under such circumstance, the firm O has to pay neither its variable costs nor its fixed costs O still has to pay its fixed costs, but not its variable costs O still has to pay both its variable costs and its fixed costs O still has to pay its variable costs, but not its fixed costs

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

Question 16 Refer to Figure 5-1 The firm will earn positive economic profits if the price is P4 only O P4 or P3 only P4, P3, or P2 only O any of P4, P3, P2, or P1
The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $7.50, a profit-maximizing firm would: Price and cost 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 2 MC y A A 1 B a 10 11 12 ATC AVC 13 Quantity Produce between 10 and 11, for a positive economic profit Produce about 9, for an economic profit of over $9 Produce between 10 and 11, for an economic profit of about $0 Produce about 9, for an economic profit of less than $9 Produce about 10, for an economic profit of about $20
Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q^2 and therefore MC = q At what quantity is AVC at its minimum (at what AVC level)? At what quantity is ATC at its minimum (at what ATC level)? Calculate ATC at q = 2 and q = 8 and sketch MC, AVC and ATC between q = 0 and q = 8
MC Price AC £/unit AVC D2 D3 D1 D4 Quantity/ week Figure 9 Cost curves for a price-taker firm Figure 9 shows a price-taker firm, with average cost AC, average variable cost AVC, and marginal cost MC curves. Select the demand curve shown on Figure 9 to represent a firm making only normal profit. Select one: D3 D4 O D2 O D1
Use the following diagram, which shows the average and marginal cost structure of a perfectly competitive firm, to answer questions 28.) – 35.): Cost 15 B 12 10 10 15
The average variable cost (AVC) 1 and average total cost (ATC) of a price taker firm are provided below. According to this table, if the marginal revenue (MR) is $95, what decision should this firm take in the short-run? Quantity Average Variable Cost Averge Total Cosm 100 25 100 20 150 20 150 23 100 15 100 17 100 19 15030 150 19 150.25 11 O Exit the market Enter in to the market The firm will go for a temporary shutdown Continue production
Quantity Price Total Fixed Costs Variale Cost Total Costs Average Variable Costs Average Total Cost Marginal Cost Total Revenue Marginal Revenue 0 35 25 0 1 35 25 20 2 35 25 25 3 35 25 35 4 35 25 52 5 35 25 80 If this firm produces a quantity of zero units, what is the total profits? What is the firm's marginal cost at a production level of two units? What is the average variable cost at a production level of five units? This firm becomes profitable producing at a quantity of ___ units. The average total cost is smallest at which level of production? At what quantity should this firm produce to maximize their profits based on your calculations? The total costs to produce four units is __________ while the average total cost to produce four units is _________.
Use the figure below to answer the following question. Total revenue and total cost (dollars) 400 300 Z 200 100 Q 0 99 Quantity Figure 12.2.1 Refer to Figure 12.2.1, which shows a perfectly competitive firm's total revenue and total cost curves. Which one of the following statements is false? A) At an output of Q1 units a day, the firm makes zero economic profit. B) At an output less than Q1 units a day, the firm incurs an economic loss. OC) At an output of Q2 units a day, the firm incurs an economic loss. D) Economic profit is the vertical distance between the total revenue curve and the total cost curve. E) At an output greater than Q3 units a day, the firm incurs an economic loss. Main Content
20) What will a firm in a perfectly competitive industry do in the short-run if the price of its product decreases below the firm's average variable costs but still above average total costs? A) Do nothing B) Increase production C) Decrease production D) Shut down
Suppose a perfectly competitive firm is experiencing short run economic losses. The firm will remain in the industry as long as a) marginal revenue equal to marginal cost b) price is greater than its minimum average variable cost O c) total revenue and total cost d) total revenue and average total cost
Assume that there are 100 identical company in the perfectly competitive cabbage industry. Each firmhas a short-run total cost curve given by ST C = 0.5Q2 − 10Q + 300. Solve the following: 1. Derive expressions for the corresponding short-run average cost, average variable cost,average fixed cost curve, and marginal cost.2. Calcalute the firm’s short-run supply curve with market price (P) as a function of Q (thenumber of kilos of cabbage)3. Show the industry supply curve for the 50 firms in this industry