suppose now that the firm must pay a fixed cost of c > 0 in order to produce (e.g., this could be the cost of buying a manufacturing plant). If the firm chooses not to produce at all, it does not incur the fixed cost. If it chooses to produce any strictly positive quantity, it must incur the full fixed cost of č. Suppose p = w = r = 4. When will the firm choose to produce a strictly positive amount of the good Y? Write down the firm's supply and profit functions.
suppose now that the firm must pay a fixed cost of c > 0 in order to produce (e.g., this could be the cost of buying a manufacturing plant). If the firm chooses not to produce at all, it does not incur the fixed cost. If it chooses to produce any strictly positive quantity, it must incur the full fixed cost of č. Suppose p = w = r = 4. When will the firm choose to produce a strictly positive amount of the good Y? Write down the firm's supply and profit functions.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Costs And The Supply Of Goods
Section: Chapter Questions
Problem 16CQ
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Question
![suppose noW
that the firm must pay a fixed cost of ē > 0 in order to produce (e.g.,
this could be the cost of buying a manufacturing plant). If the firm
chooses not to produce at all, it does not incur the fixed cost. If it
chooses to produce any strictly positive quantity, it must incur the full
fixed cost of č.
Suppose p = w = r = 4. When will the firm choose to produce a
strictly positive amount of the good Y? Write down the firm's supply
and profit functions.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff64a7f68-a8d8-4609-95aa-fce2c58ca2c5%2Fd1ffe778-8de6-415d-b28f-177d4a96cbd2%2F98qjt0s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:suppose noW
that the firm must pay a fixed cost of ē > 0 in order to produce (e.g.,
this could be the cost of buying a manufacturing plant). If the firm
chooses not to produce at all, it does not incur the fixed cost. If it
chooses to produce any strictly positive quantity, it must incur the full
fixed cost of č.
Suppose p = w = r = 4. When will the firm choose to produce a
strictly positive amount of the good Y? Write down the firm's supply
and profit functions.
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