Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 13, Problem 14QE
To determine
The cost condition of
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if the price is less than lowest average variable cost the firm will shut down
Under what conditions will a firm shut down temporarily? Explain theoretically and graphically.
The following table shows a profit-maximizing producer's marginal costs. The
firm is operating in a perfectly competitive market and has fixed costs of
$500.
Marginal Cost ($)
200
Quantity
1
2
150
3
100
4
170
5
230
16
300
7
420
18
600
Refer to the above information to answer this question. What is the
breakeven price?
Chapter 13 Solutions
Microeconomics
Ch. 13.1 - Prob. 1QCh. 13.1 - Prob. 2QCh. 13.1 - Prob. 3QCh. 13.1 - Prob. 4QCh. 13.1 - Prob. 5QCh. 13.1 - Prob. 6QCh. 13.1 - Prob. 7QCh. 13.1 - Prob. 8QCh. 13.1 - Prob. 9QCh. 13.1 - Prob. 10Q
Ch. 13 - Prob. 1QECh. 13 - Prob. 2QECh. 13 - Prob. 3QECh. 13 - Prob. 4QECh. 13 - Prob. 5QECh. 13 - Prob. 6QECh. 13 - Prob. 7QECh. 13 - Prob. 8QECh. 13 - Prob. 9QECh. 13 - Prob. 10QECh. 13 - Prob. 11QECh. 13 - Prob. 12QECh. 13 - Prob. 13QECh. 13 - Prob. 14QECh. 13 - Prob. 15QECh. 13 - Prob. 16QECh. 13 - Prob. 17QECh. 13 - Prob. 18QECh. 13 - Prob. 19QECh. 13 - Prob. 20QECh. 13 - Prob. 1QAPCh. 13 - Prob. 2QAPCh. 13 - Prob. 3QAPCh. 13 - Prob. 4QAPCh. 13 - Prob. 5QAPCh. 13 - Prob. 1IPCh. 13 - Prob. 2IPCh. 13 - Prob. 3IPCh. 13 - Prob. 4IPCh. 13 - Prob. 5IP
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- What is the firm’s shutdown price?arrow_forwardConigan Box Company produces cardboard boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for $100 per thousand. Conigan's total and marginal cost curves are:TC = 3,000,000 + 0.001Q2MC = 0.002Qwhere Q is measured in thousand box bundles per year. Calculate Conigan's profit maximizing quantity. Is the firm earning a profit?arrow_forwardWhy should a firm shut down if its average variable cost curve is above the price of their product?arrow_forward
- What is the term for the minimum level of output a firm must produce to cover its variable costs in the short run? a) Shutdown point b) Marginal cost point c) Average cost point d) Total cost pointarrow_forwardA firm will shut down in the short run if TR < TC P< ATC TR= TC P = MC P< AVCarrow_forwardAMCO is a firm producing tables in Spain. It has a fixed cost of 100$ and a cost per unit of production of 2$. The demand function for a table is given by: P = 60 - 4Q 1. Find the equations of TR and TC. 2. Write down the equation of the profit. 3. Find Qwhen TR = 0 (x-intercept/roots). 4. Find Qwhen TR is a maximum. 5. Deduce the maximum total revenue (TR max).arrow_forward
- Decide whether a firm making short-run losses should continue to operate or shut down its operations.arrow_forwardIf this cruise line faces a perfectly competitive market, calculate its net revenue would it be mr=mc * Q= net rev?arrow_forwardq = 60 − (1/2)p, where q is quantity sold per week.The firm’s marginal cost curve is given by: MC = 60. 1) How much will the firm produce in the short run? 2) What price will it charge? Please explain the calculations when providing the answers.arrow_forward
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