Homework Answers
The following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run
-price must be equal to or greater than minimum average variable cost for the firm to continue producing
option(D)
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Which of the following is not a valid generalization concerning the relationship between price and costs...
Fixed costs are irrelevant in the decision about whether to shut down production in the short...
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....
8. In the short run, a perfectly competitive firm will shut down if it is producing...
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
Question 7 5 pts Let's say that you know the following information for an oligopoly firm:...
Question 7 5 pts Let's say that you know the following information for an oligopoly firm: Total Revenue equals $200 million. Variable Costs are $170 million. Fixed Costs equal $20 million. The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising). What recommendation do you have for this firm? Assuming the firm's costs remain the same, the firm should produce fewer products in order to decrease its marginal costs. The profit...
Help with #15 please. 15. Suppose a firm ina purely competitive market discovers that the price of its product is ab...
Help with #15 please.
15. Suppose a firm ina purely competitive market discovers that the price of its product is above its minimum AVc point but everywhere below ATC. Given this, the firm: A. Minimizes losses by producing at the minimum point of its AFC curve. B. Maximizes profits by producing where MR ATC. C. Should close down immediately. D. Should continue producing in the short run.
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down...
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down in the short-run if price falls short of average total cost d. always earns a pure economic profit. e.) sets marginal cost equal to marginal revenue. 45. True/False. In the long run, all inputs AND costs are variable. a. True b. False 46. True/False. Marginal cost is calculated by dividing the change in total cost by the...
when deciding In the short run, a firm must consider the relationship between price and whether...
when deciding In the short run, a firm must consider the relationship between price and whether to operate or shut down. average variable cost O total cost average fixed cost O unavoidable cost
If the price is greater than average total cost at the profit-maximizing quantity of output in...
If the price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will: options: 1) continue to produce at a loss. 2) produce at a profit. 3) shut down production. 4) reduce its fixed costs.
when deciding In the short run, a firm must consider the relationship between price and whether...
when deciding In the short run, a firm must consider the relationship between price and whether to operate or shut down. average variable cost O total cost O average fixed cost O unavoidable cost
7. A profit maximizing firm in a competitive market produces replica toy cars. Suppose the market...
7. A profit maximizing firm in a competitive market produces replica toy cars. Suppose the market price for replica toy cars decreases to $12. At the profit maximizing (loss minimizing) quantity of 20,000 toy cars, the ATC is equal to $15 and the AFC is equal to $5. Given these conditions the (x) firm will experience losses of $60,000 since price is less than average total cost. (y) the firm will continue to produce 20,000 toy cars since it would...
D Question 25 1 pts Price in a perfectly competitive industry is determined by each firm,...
D Question 25 1 pts Price in a perfectly competitive industry is determined by each firm, depending on its costs of production. O is indeterminate in the short run is always equal to marginal revenue for the firm. O must be greater than average total cost or the firm will shut down in the short run.
Fixed costs are irrelevant in the decision about whether to shut down production in the short run because fixed costs: do not affect, and are not affected by, the quantity the firm produces. can be paid off over time. only change when production changes only change in the short run |If a profit-maximizing perfectly competitive firm shuts down in the short run, it incurs no losses. it incurs an economic loss equal to total fixed cost. its profit equals zero....
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
Question 7 5 pts Let's say that you know the following information for an oligopoly firm: Total Revenue equals $200 million. Variable Costs are $170 million. Fixed Costs equal $20 million. The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising). What recommendation do you have for this firm? Assuming the firm's costs remain the same, the firm should produce fewer products in order to decrease its marginal costs. The profit...
Help with #15 please.
15. Suppose a firm ina purely competitive market discovers that the price of its product is above its minimum AVc point but everywhere below ATC. Given this, the firm: A. Minimizes losses by producing at the minimum point of its AFC curve. B. Maximizes profits by producing where MR ATC. C. Should close down immediately. D. Should continue producing in the short run.
44. Under both perfect competition and monopoly, a firm: a. is a price taker. b. is a price maker. c will shut down in the short-run if price falls short of average total cost d. always earns a pure economic profit. e.) sets marginal cost equal to marginal revenue. 45. True/False. In the long run, all inputs AND costs are variable. a. True b. False 46. True/False. Marginal cost is calculated by dividing the change in total cost by the...
when deciding In the short run, a firm must consider the relationship between price and whether to operate or shut down. average variable cost O total cost average fixed cost O unavoidable cost
when deciding In the short run, a firm must consider the relationship between price and whether to operate or shut down. average variable cost O total cost O average fixed cost O unavoidable cost
D Question 25 1 pts Price in a perfectly competitive industry is determined by each firm, depending on its costs of production. O is indeterminate in the short run is always equal to marginal revenue for the firm. O must be greater than average total cost or the firm will shut down in the short run.
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