PRIN.OF ECON.ACCESS CODE
2nd Edition
ISBN: 9780393691757
Author: Mateer
Publisher: NORTON
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Question
Chapter 9, Problem 4QFR
To determine
The difference between the decision to go out of business and the decision to shut down
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Give typing answer with explanation and conclusion
Give an example of a business that ceased production. Was the company's decision to stop production a shutdown or a decision to exit the market? How do you know?
When would a profit-maximizing firm shut down in the short run?
Imagine you're owner of domino pizza. How would to maximize store's profit ?
Chapter 9 Solutions
PRIN.OF ECON.ACCESS CODE
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- How does perfect competition effect the pharmaceutical industry?arrow_forwardWhat is the shutdown decision of the firm? How should a firm decide whether to continue business or shut down in the short run?arrow_forwardMany firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?arrow_forward
- Consider the following market for Tim's Terrible T-shirts a firm company producing in the monopolistically competitive t-shirt market. MC $14 $12 ATC $10 $8 $6 $4 $2 MR 0. 10 30 40 50 60 70 80 Quantity Price 20arrow_forwardCan you give examples of companies with perfect competition?arrow_forwardHannah has a small business making clothing alterations. Which of the following products would dramatically affect her profit margins if the price were to decrease for that product? A. dresses B. thread C. sewing machinesarrow_forward
- Tim is thinking of opening a garment store. He estimates that it would cost $270000 per year to rent the location and buy the merchandise. In addition, he would have to quit his $63000 per year day job. Tim estimates he can sell $315600 worth of garments in a year. a. What will be the accounting profit and economic profit for Tim? b. If you are an economist, should you suggest opening the store? Why?arrow_forwardWhy would a firm that is making loss in the short-run choose to operate rather than shut down?arrow_forwardIf you're a manager in a highly competitive business such where should you put your most effort to maximize profit? Pricing or cost cutting?arrow_forward
- Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down? Think of recent examples.arrow_forwardWhat are the characteristics of a PC firm? Using Hot Dogs, Graph the market and the individual supply, demand and costs for Hot dogs side by side. Make sure to include the S.R. and L.R Price, Quantity, Demand, MR, MC, ATC, and profit.arrow_forwardDescribe how your restaurant would maximize its short-run profits.arrow_forward
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