Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 7, Problem 4MC
To determine
Economies of scale.
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Check out a sample textbook solutionStudents have asked these similar questions
(1) Use the graph to answer the question below. The quantity is measured in thousands of units.
What will this firm decide to do in the long run?
A-It will stay in the market because the price is above its AVC at its profit-maximizing output.
B-It will leave the market because the price is below its ATC at its profit-maximizing output.
C-It will increase its price to point B to earn normal profit.
D-It will increase its output until its profit-maximizing output level is equal to B.
E-Insufficient data to determine.
(2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do?
A-Produce more milk. B-Produce less milk. C-Shut down in the short run. D-Operate in the short run and leave the industry in the long run. E-Insufficient information to determine
(3) A firm operating in a perfectly competitive market cannot…
Which of the following represents a long-run decision for the firm?
a. rehiring workers who were previously laid off.
b. determining what price to charge for a given level of output.
c. deciding how much output to supply to the market at the current market price.
d. building another wing on the plant in order to add a new assembly line.
answer. (d. building another wing on the plant in order to add a new assembly line.)
Please help me explain this questions. Thanks in advance
Write a paper based on The Theory of the firm, under these two subtitles: 1. Division of labor, 2. Demand and Supply Factors of Production 3. Law of Return to Scale
Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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