Which of the following is NOT true when a perfectly competitive firm shuts down in the short run? A) total revenue equals zero B) variable cost equals zero C) the firm will earn a loss D) fixed costs are positive E) fixed costs are zero

Which of the following is NOT true when a perfectly competitive firm shuts down in the short run? A) total revenue equals zero B) variable cost equals zero C) the firm will earn a loss D) fixed costs are positive E) fixed costs are zero

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: or a perfectly competitive firm in the long run, price is Greater than long-run marginal revenue…

A: In a perfectly competitive market, price is determined by the market forces.

Q: fa perfectly competitive firm finds that the price exceeds its ATC, then the firm A) is incurring an…

A: A perfectly competitive market is the one where there are large number of buyers and sellers selling…

Q: For a firm in Perfect Competition, the Industry Price is equal to $12, Average Total Cost is equal…

A: Short-Run Supply Curve: The short-run supply curve shows the relationship between the market price…

Q: What is the short-run Shutdown condition for a perfectly competitive firm? P>AVCminimum…

A: In a market, a shutdown point refers to the point at which a firm is unable to recover its operating…

Q: The shut-down point for a competitive firm is in the short run is where

A: In the short run the shut-down point for a competitive firm is in the is where the average…

Q: If a perfectly competitive firm is producing an output level where average variable cost is equal to…

A: "A profit maximizing firm in a perfectly competitive market will maximize profits at a point where…

Q: A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost…

A: Profit maximization is the short run or long run process by which a firm may determine the price,…

Q: The long-run supply curve of a perfectly competitive industry with increasing costs is: a)…

A: Perfectly competitive industry is the one where there are large number of buyers and sellers with…

Q: A perfectly competitive industry is composed of 100 identical firms with cost structure: q…

A: The variable cost can be calculated by using the below formula: If Q is 1 and TC is 8, then the…

Q: Refer to the graph that depicts Joe's family restaurant in a perfectly competitive market. The firm…

A: A perfectly competitive market is the kind of market with multiple sellers producing identical…

Q: A perfectly competitive firm's supply curve is its marginal cost curve. marginal cost…

A: In a perfect competition market structure, there are several buyers and sellers, there is freedom of…

Q: The demand curve and supply curve for a perfectly competitive market are: Q = 500 – 5P and Q = 320 +…

A: The firm will shut down if Price < AVC and will continue operating if Price > AVC. Using…

Q: Assume a competitive firm faces a market price of $120, a cost curve of: and a marginal cost of:…

A: In case of Perfect Competition, there are large number of firms producing similar products. An…

Q: Question 9 Which of the following is(are) correct? A competitive firm will exit the market in the…

A: Economic profit includes a normal profit. Even when economic profits are zero, the firm is earning…

Q: Which of the following is not a necessary condition for long-run equilibrium under perfect…

A: A market structure known as perfect competition is typified by a large number of firm's offering the…

Q: Here is information pertaining to a firm operating in a perfectly competitive marke Price $10.00…

A: A perfectly competitive firm produces output where P= MC

Q: Suppose a perfectly competitive firms demand curve is below the ATC curve. Explain the conditions…

A: Since the table is missing, it is difficult to answer for sub-parts 'a', and 'b'.

Q: What is the profit maximizing level of output for the firm? How much profit is this firm earning?…

A: Profit maximizing level of output is achieved where price and quantity are equal i.e., in…

Q: Imagine a firm in a perfectly competitive market has the short run cost function SRTC=200+10q+0.5q2,…

A: Short-run total cost (SRTC) The SRTC is a cost in the production process that has a short-term…

Question

Which of the following is NOT true when a perfectly competitive firm shuts down in the short run?

A) total revenue equals zero

B) variable cost equals zero

C) the firm will earn a loss

D) fixed costs are positive

E) fixed costs are zero

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define perfect competition:

VIEW

Step 2: Answer with explanation:

VIEW

Step 3: state why other options are true:

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A perfectly competitive firm will choose to shut down when the average total cost intersects the marginal cost curve below the average variable cost curve
A perfectly competitive firm is making losses in the short run. The market price will increase in the long run. True False
Firms total revenue? Firms total cost? Firms total profit?
Determine a perfectly competitive firm’s profit-maximizing output level and profit in the short run.
the profit maximization condition for a perfectly competitive firm in the short-run- is
A perfectly competitive firm can A) sell all of its output at the prevailing market price. B) set a higher price to customers who are willing to pay more. C) raise its price in order to increase its total revenue. D) sell additional output only by lowering its price. E) usually not sell all the output it produces, but still "over-produces" because there are some periods when it can sell the extra output at very profitable prices.
If a profit-maximizing firm in a perfectly competitive industry is currently experiencing an economic loss at its profit-maximizing quantity, then: Average total cost is greater than price. Price is less than marginal cost Price is less than average variable cost It should shut down immediately unless its total revenues are greater than its total fixed costs
The table below shows the price and cost information for a firm that operates in a perfectly competitive market. Based on this information, what is the profit-maximizing output quantity? Price Quantity Total Cost $8 $8 $8 $8 $8 $8 $8 $6 $10 $15 $21 $28 $35 $45 1 2 3 4 5 6 Profit is maximized at a quantity of type your answer. units, where it is equal to $ type your answer. Is the long run price in this market likely to be higher or lower than the current price of $8? type your answer.
In a competitive market characterized by increasing costs, the long-run industry supply curve gives the minimum long-run average cost of production at various levels of industry output. long-run industry supply curve gives the long-run marginal cost of production at various levels of industry output. long-run industry supply curve is upward sloping. both a and b all of the above
Which of the following is not a characteristic of a perfectly competitive market? a) Many buyers and sellers b) Homogeneous products c) Barriers to entry d) Perfect information
In a perfectly competitive market with constant cost industry and with the market demand Q=1,800-10p, each of the identical firms operating in it has a total cost function TC(q) = 100 + 4q2 . How many firms are there in the market in long run equilibrium?
Consider the perfectly competitive market for sports jackets. The following graph shows the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves for a typical firm in the industry.