If a firm is currently equating MR= MC and product price = $24, AVC = 22...
Homework Answers
1. Profit = Total revenue - Total cost
=> 24 - 26 => -2 per unit.
Therefore there is loss of $2 per uit.
2. As the firm is operatinng in losses covering its variable cost but not fixed cost in entirety. Therefore in the long run, firm needs to recover its fixed cost as well in order to remain operational. Hence In the long run firm should be operating where MR = ATC. If this does not happen and firm will still not be able to cover its fixed cost in the long run then it needs to shut down its business.
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If a firm is currently equating MR= MC and product price =
$24, AVC = 22...
If a perfect competitive firm is currently equating MR and MC and product price = $200,...
If a perfect competitive firm is currently equating MR and MC and product price = $200, AVC = $180, and ATC = $200, then in the long run this firm: Group of answer choices A. will continue to operate at a loss. B. will earn a zero economic profit. C. will go out of business. D. should increase output. E. should decrease price.
Price MC ATC AVC - MR 40 45 47 Quantity a. (1 points) Using the graph...
Price MC ATC AVC - MR 40 45 47 Quantity a. (1 points) Using the graph above, what is the profit maximizing or loss minimizing output and price? b. (1 point)Using the graph above, what is the profit or loss for the profit maximizing firm? c. (2 points) What would happen in this market in the long run. Be sure to explain in detail what happens in the market and the firm. What would be the long run price, and...
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Graph Worksheet MC DI MR P4 ATC P3 P2 AVC PI 02 1. What is the price and quantity at the optimum level of production? Is this an economic profit, loss, or break-even? Should the firm produce? 2. If the industry model is monopolistic competition, what will happen to the industry? What will happen to the demand and marginal revenue curves for the individual firm? In the long run where will the demand curve be? Will the firm achieve productive...
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Homework Assignment # 5 ATC AVC Price МC 20 Demand-AR-MR 10 22 24 18 40 1 (1 points) Using the graph above, what is the profit maximizing or loss minimizing output and price? 2. (1 point)Using the graph above, what is the profit or loss at the profit maximizing or loss minimizing point 3. (1 point) What is the shutdown price and quantity? 4. (1 point) Explain why a firm may continue to produce in the short-run even though the...
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Exhibit 12-6 MC ATC AVC -P-MR-AR Quantity (firm) for this firm is represented by the area of Refer to Exhibit 12-6. The short run profit; OP,Bq loss; OP Bq profit; PABP loss; PABP Price
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC...
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC ا أ ا 1 2 3 4 5 6 7 8 Quantity Suppose the current price is $6. What will happen in the long run? O Nothing will happen in the long run. The firm is earning zero economic profit. O Since the firm is earning a positive economic profit, there is an incentive for new firms to enter the industry in the long...
A firm's ATC, AVC, MR, and MC curves are shown in the graph below. Profit-Maximizing Point...
A firm's ATC, AVC, MR, and MC curves are shown in the graph below. Profit-Maximizing Point Profit-Maximizing Point Economic Profit (shaded region) 54+ 48 IMR Cost and revenues AVC HHHHHHHHHHHHHHHHHHHHO 044 Reset 8 12 16 20 24 28 32 36 40 44 48 Output a) Draw the short-run profit-maximizing point and the economic profit region. Select which item you want to draw from the drop-down menu at the top of the graph to draw that item. b) What is the...
Suppose product price is fixed at $24; MR = MC at Q = 200; AFC =...
Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $16. What do you advise this firm to do? a. Decrease output. b. Stay at the current output; the firm is losing $200. c. Increase output. d. Stay at the current output; the firm is earning a profit of $400.
$ per unit MC ATC MR $40 AVC $20 2 4 6 8 10 12 Output (9) The graph above shows a firm's Marginal Revenue (MR), M...
$ per unit MC ATC MR $40 AVC $20 2 4 6 8 10 12 Output (9) The graph above shows a firm's Marginal Revenue (MR), Marginal Cost (MC), Average Total Cost (ATC) and Average Variable Cost (AVC). This firm is a profit-maximizing price taker. Find the firm's short run shutdown price. (Do not include a S sign in your response. Round to the nearest two decimal places if necessary.) Answer: Check
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Graph Worksheet MC DI MR P4 ATC P3 P2 AVC PI 02 1. What is the price and quantity at the optimum level of production? Is this an economic profit, loss, or break-even? Should the firm produce? 2. If the industry model is monopolistic competition, what will happen to the industry? What will happen to the demand and marginal revenue curves for the individual firm? In the long run where will the demand curve be? Will the firm achieve productive...
Homework Assignment # 5 ATC AVC Price МC 20 Demand-AR-MR 10 22 24 18 40 1 (1 points) Using the graph above, what is the profit maximizing or loss minimizing output and price? 2. (1 point)Using the graph above, what is the profit or loss at the profit maximizing or loss minimizing point 3. (1 point) What is the shutdown price and quantity? 4. (1 point) Explain why a firm may continue to produce in the short-run even though the...
Exhibit 12-6 MC ATC AVC -P-MR-AR Quantity (firm) for this firm is represented by the area of Refer to Exhibit 12-6. The short run profit; OP,Bq loss; OP Bq profit; PABP loss; PABP Price
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC ا أ ا 1 2 3 4 5 6 7 8 Quantity Suppose the current price is $6. What will happen in the long run? O Nothing will happen in the long run. The firm is earning zero economic profit. O Since the firm is earning a positive economic profit, there is an incentive for new firms to enter the industry in the long...
A firm's ATC, AVC, MR, and MC curves are shown in the graph below. Profit-Maximizing Point Profit-Maximizing Point Economic Profit (shaded region) 54+ 48 IMR Cost and revenues AVC HHHHHHHHHHHHHHHHHHHHO 044 Reset 8 12 16 20 24 28 32 36 40 44 48 Output a) Draw the short-run profit-maximizing point and the economic profit region. Select which item you want to draw from the drop-down menu at the top of the graph to draw that item. b) What is the...
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Price ATC MC MR Quantity This monopolistically competitive firm is currently experiencing if it is operating at the profit-maximizing output. a profit zero economic profits a loss
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