Suppose a perfectly competitive firm faces the following situation: P = $10, output = 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. O The firm earns a profit but should decrease output to maximize its profits.

Suppose a perfectly competitive firm faces the following situation: P = $10, output = 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. O The firm earns a profit but should decrease output to maximize its profits.

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

Tara sells her organic carrots in a perfectly competitive market for a price that is just higher than her minimum average variable cost (AVC) of production, but lower than her minimum average total cost (ATC) of production. Which of the following statements is then TRUE? O She is incurring a loss because price is less than ATc. O She can minimize her losses by shutting down her operations now. O Although she is currently incurring a loss, she could restore profitability by advertising her carrots. She is carning a profit because price is above AVC.
Is my answer correct?
Why is a firm in a perfectly competitive market called a price taker? Why do the price, MR and demand faced by a firm in such a market coincide? Explain. please don,t copy and paste from anywhere. Answer step by step and use graph if possible
Looking to see how to resolve
H11.
Which of the followings is the basic trait of a Perfectly Competitive market? The market has only one seller The products of the firms are differentiated. There are barriers to entry for firms outside the market. O There are numerous firms operating in the market. O A perfectly competitive firm is not productive efficient.
Please no written by hand
15 $40 $35 i of $30 ATC AVC $25 P = MR $20 $15 $10 $5 $0 20 40 60 80 100 120 Output (Q) The diagram above shows a Perfectly Competitive firm in the short-run. This firm will minimize its loss by choosing the Output (Q) level: Select one: а. 80 b. 60 С. 100 d. 40
There are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generates profits of $24 for every $300 invested. Instructions: Enter your answers as a whole number. a. What is the percentage rate of return for these 298 dairies? percent b. The other two dairies have a cost structure that generates profits of $22 for every $200 invested. What is their percentage rate of return? percent
QUESTION 20 Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. Given this, the firm O A. minimizes losses by producing at the O B. maximizes profits by producing where MR = ATC O C. should close O D. should continue producing in the short run but leave the industry in the long run if the situation persists minimum point of its AVC curve immediately
Which of the following best describes the short-run supply curve for an individual perfectly competitive firm? Select one: a. It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. Ob. It is the upward-sloping part of the firm's marginal cost curve. O c. It is the firm's marginal cost curve. Od. It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.
QUESTION 28 A perfectly competitive firm is producing at an output level of 1200 where marginal revenue is $15, marginal cost is $15, average variable cost is $14, average total cost is $21.50. The fim is O making a profit of $1,200 O making a loss of -$24,600 O making a loss of-$7,800 O making a profit of $7,800