The price elasticity of demand increases with the length of the period considered because consumers incomes will increase over time the demand curve will shift outward as time passes all prices will increase over time consumers will be better able to find substitutes. 2 A profit-maximizing firm in the short run will expand output until marginal cost begins to rise until total revenue equals total cost until marginal cost equals average variable cost as long as marginal revenue is greater than marginal cost

Q: Lesson 9 Question 2

A: Concept: The short-run shutdown point occurs when a firm is unable to cover its variable costs of…

Q: $28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal…

A: a) Price per unit Quantity Total revenue Marginal revenue Total cost Marginal cost Profit…

Q: in the long run, what will be the firm's profit maximizing quantity?

A: in the long run a perfectly competitive firm produce output at the minimum point of AC

Q: On the following graph, use the orange points (square symbol) to plot points along the portion of…

A: The firm starts producing and selling the level of output at which the average variable cost (AVC)…

Q: 5. Profit maximization and shutting down in the short run Suppose that the market for black leather…

A: In Economics, Costs are usually categorized according to their relationship with the level of output…

Q: Please fill out the table attached and answer questions.

A:

Q: Demand for Air at Ally's shop Price (P) Quantity (Q) Total Revenue Marginal Revenue 140 1 140 T 110…

A: The output effect generally refers a change in the level of production or output resulting from a…

Q: Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of…

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A: When the market is highly competitive with little product differentiation. This implies the market…

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Q: According to the graph below, the firm doesn't make a profit when the quantity exceeds what value?…

A: Profit is the difference between the total revenue and and total cost.

Q: 1. Consolidated Salt Company sells table salt to both retail grocery chains and commercial users…

A: Answer: The demand function for retail grocery chains: P1=180-8Q1 The demand function for commercial…

Q: 16. The accompanying graph shows the short-run demand and cost situation for a price searcher in a…

A: 16.

Q: Given the information in the table at right, calculate the dry cleaner's marginal revenue (MR) and…

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Q: Price: 2.) Quantity: 3.) Total Revenue: 4.) Total Cost: 5.) Total Variable Cost: 6.) Total Fixed…

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Q: f the firm is producing at a quantity where marginal revenue exceeds marginal cost then, in order to…

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Q: Currently the firm is producing at a profit maximizing quantity of output and has a total revenue of…

A: Marginal cost is the additional cost of producing one more unit of a good. Marginal revenue is the…

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Q: Which of the following statements is true ?

A: Correct answer is option B . A firm should increase quantity as long as price is greater than…

Q: b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand…

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Q: Which of the following statements is not correct? Only for competitive firms does average revenue…

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Q: On the graph input tool, change the number found in the Quantity Demanded field to determine the…

A: Demand: Demand for a commodity can be defined as the desire and willingness of a consumer to acquire…

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?