What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost = $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b C d e Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should remain in the market as producers. Continue to produce in the short run, because their loses will be $100,000 smaller compared to their loses if they shut down. In the long run they should exit the market.

What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost = $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b C d e Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should remain in the market as producers. Continue to produce in the short run, because their loses will be $100,000 smaller compared to their loses if they shut down. In the long run they should exit the market.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...

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What two lines on a cost curve diagram intersect at the shutdown point?
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.