The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows). 1. What is the firm's shutdown point? A firm will stop producing an output in the short run when the market price of the good is _________. A. below minimum AVC B. equals ATC C. below minimum ATC D. equals MC
The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows). 1. What is the firm's shutdown point? A firm will stop producing an output in the short run when the market price of the good is _________. A. below minimum AVC B. equals ATC C. below minimum ATC D. equals MC
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows).
1.
What is the firm's shutdown point?A firm will stop producing an output in the short run when the market price of the good is _________.
below minimum AVC
equals ATC
below minimum ATC
equals MC
This firm's shutdown point is at a market price of
$ ?
per unit and its profit-maximizing output is
?
units.
Transcribed Image Text:The table provides data on a market demand schedule (top two rows) and a firm's average and
marginal cost schedules (bottom four rows).
Price P ($)
24
20
16
12
8 4
Quantity
3,000 4,000 5,000 6,000 7,000
8,000
1. What is the firm's shutdown point?
A firm will stop producing an output in the short run when the market price of the good is
Firm's
1
2
3 units
4
5
output
unit
units
units units
units
MC ($)
АTC ($)
A. below minimum AVC
11.00
11.13
12.00
13.63 16.00 19.13
B. equals ATC
13.50 12.25
12.00
12.19 12.70
13.50
AVC ($)
11.25
11.13
11.25
11.63 12.25 13.13
C. below minimum ATC
D. equals MC
This firm's shut
wn point is at a market price of $
per unit and its profit-maximizing output is
units.
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