Suppose you as a business person find that the price of your product is less than minimum average variable cost (AVC). In this case, you should: A) Minimize your losses by producing where P = MC B) Maximize your profits by producing where P = ATC C) Close down because, by producing, your losses will exceed your total fixed costs D) Close down because your total revenue exceeds your total variable costs

Suppose you as a business person find that the price of your product is less than minimum average variable cost (AVC). In this case, you should: A) Minimize your losses by producing where P = MC B) Maximize your profits by producing where P = ATC C) Close down because, by producing, your losses will exceed your total fixed costs D) Close down because your total revenue exceeds your total variable 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

When the marginal cost curve intersects the average variable cost curve, which of the following is true? Marginal cost is equal to marginal revenue. This is the quantity a firm would choose to produce in the short run. Average total cost is at its lowest point. Average total cost is at its highest point. Average variable cost is at its lowest point.
Show full answers & steps to part b) c) & d)
Using price (P), quantity (q), and average total cost (ATC), define profit rate (per unit profit), and total profits? Now assume you own a small business. Explain the difference between economic profits and accounting profits as concerns your business. What does it mean to say economic profit equals zero for your business and why does the firm continue to operate if economic profit equals zero (normal profit)?
For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.50 per slice?Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Instructions: Enter your response as a whole number. If you are entering a negative number, be sure to include a negative sign (−). When the price is $1.50 per slice, the profit-maximizing level of output is slices per day. Instructions: Enter your response rounded to the nearest penny (two decimal places). At the profit-maximizing level of output, the producer's profit is: $ per day.
4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in San Francisco. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the following table. Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) Quantity Total Cost Marginal Cost Fixed Cost Variable Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) 120 1 210 2 270 3 315 4 380 5 475 630
Suppose a firm has increasing returns to scale. The firm then increases its use of all inputs. Which of the following statements is correct? Group of answer choices The firm’s output will decrease. Its long run average total cost will decrease. The firm’s output will increase. Its long run average total cost will increase. The firm’s output will increase. Its long run average total cost will remain the same. The firm’s output will increase. Its long run average total cost will decrease. The firm’s output will decrease. Its long run average total cost will increase.
Jeb owns a small marketing company, which he operates from a home office. Jeb’s home office is an example of which of the following? Fixed cost Marginal cost Implicit cost Explicit cost
Find the marginal cost, marginal revenue, and marginal profit functions. C(x) = 7x²; R(x) = x³ + 11x + 15 marginal cost marginal revenue marginal profit Find all values of x for which the marginal profit is zero. Interpret your answer. (Enter your answers as a comma-separated list.) X =
Consider a firm with the following cost function: C (q) = 4q^2 + 100 Find the long-run supply and the short-run supply of the firm, under the assumptions that the total cost function is the same in the long and in the short run, but the xed cost is sunk in the short run.
A firm is producing a positive amount of output Q in the short run. At this output level, which of the following is true? I. P>SRMC. II. P>ANSC. II. SRMC is downward sloping. I only Il only I and II only I and III only Il and III only
Variable costs are Multiple Choice costs that remain to be paid even if the firm shuts down temporarily. costs that change every day or every month. costs that change with the level of production. changes in total cost due to the production of an additional unit of output.
Use the table below to answer the following question. Units Total Fixed Cost Total Variable of Output (dollars) Cost (dollars) 1 150 25 2 150 48 3 150 70 150 100 What is the marginal cost (MC) of producing the fourth unit of output?