In the short run, under what conditions should a firm produce if its price is below...
In the short run, under what conditions should a firm produce if its price is below average total cost? What are the conditions that it should not produce? Explain your reasoning.
Homework Answers
Answer : The firm's shutdown point is that point where Price = Average Variable Cost occur. In short run if the price is below the average total cost then the firm will continue it's production based on one condition. The condition is that the price have to be higher than the average variable cost.
But if the price is lower than the average variable cost then the firm should not produce. Because in this situation the firm will face extreme loss in short run. This is the condition where the firm should not produce in short run.
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In the short run, under what conditions should a firm produce if
its price is below...
Question 19 In the short run, the firm should continue to produce if and only if...
Question 19 In the short run, the firm should continue to produce if and only if Price exceeds average fixed cost. Price exceeds average variable cost. Price exceeds average total cost. Price exceeds marginal cost. Marginal revenue equals marginal cost. • Previous
A) What is the short-run equilibrium price? B) How much output each firm produce in the...
A) What is the short-run equilibrium price?
B) How much output each firm produce in the short-run?
C) In the short-run, how much profit does each firm earn?
D) In the long-run, what do you expect to happen?
E) What is the long-run equilibrium price?
F) What is the long-run profit per firm?
G) In the long-run, how many firms will be in the industry?
Suppose that marginal cost and average total cost for the typical firm in the industry...
2. Under what conditions should a competitive firm shut down in the short run? Also show...
2. Under what conditions should a competitive firm shut down in the short run? Also show it in a graph.
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...
2. Each of the following situations could exist for a perfectly competitive firm in the short run. In each case, ex...
2. Each of the following situations could exist for a perfectly competitive firm in the short run. In each case, explain whether the firm should produce in the short run, shut down in the short run, or whether additional information is needed to determine what it should do. a. Total costs exceed total revenue at all output levels. (4 pts) b. Marginal revenue exceeds marginal cost at the current output level. (4 pts) C. Price exceeds average total cost at...
SHOW ALL WORK A profit-maximizing firm in the short run has total fixed costs of $200....
SHOW ALL WORK A profit-maximizing firm in the short run has total fixed costs of $200. Its variable costs are as below. Output Total Variable Cost 0 $0 1 $190 2 $360 3 $510 4 $650 5 $800 6 $990 7 $1,190 8 $1,420 9 $1,770 10 $2,170 (A) (3 pts.) Calculate average total cost when output is 5 units....
In the short run, the perfectly competitive firm will continue to produce even though it might...
In the short run, the perfectly competitive firm will continue to produce even though it might experience an economic loss if: a.total cost exceeds marginal cost. b.the market price exceeds the average variable cost. c.total revenue exceeds total costs. d.the market price exceeds the average fixed cost.
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC),...
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC), and long-run average cost (LATC) curves of a typical perfectly competitive firm that uses only labour and physical capital to produce its product and the current market price (PⓇ). S/unit MC ATC LATC B Pa E Q1 Q2 Quantity a) How many units of output would the firm choose to produce in the short run? Explain. b) Is the firm making an economic profit...
3. A firm in a perfectly competitive market will produce no output in the short run...
3. A firm in a perfectly competitive market will produce no output in the short run if the price is below $18 but will produce if the price is above $18. The smallest quantity they will produce in the short run is 8. Firms will earn 0 economic profit if the price is $74 and its profit maximizing quantity is 12 at that price. The firm’s fixed cost is $576. Assume the good can be produced in continuous quantities. Draw...
8:55 1 18:24:19 Exit The figure below shows short-run average total cost curves for a firm...
8:55 1 18:24:19 Exit The figure below shows short-run average total cost curves for a firm under four different production technologies. Assume that there are only four different technologies that the firm could use. Price ATC ATC ATC. Q.9, Q. QQQ Q Quantity Refer to the figure above. The minimum average total cost to produce a quantity between QD and QF is achieved by using technology
Question 19 In the short run, the firm should continue to produce if and only if Price exceeds average fixed cost. Price exceeds average variable cost. Price exceeds average total cost. Price exceeds marginal cost. Marginal revenue equals marginal cost. • Previous
A) What is the short-run equilibrium price?
B) How much output each firm produce in the short-run?
C) In the short-run, how much profit does each firm earn?
D) In the long-run, what do you expect to happen?
E) What is the long-run equilibrium price?
F) What is the long-run profit per firm?
G) In the long-run, how many firms will be in the industry?
Suppose that marginal cost and average total cost for the typical firm in the industry...
2. Under what conditions should a competitive firm shut down in the short run? Also show it in a graph.
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...
2. Each of the following situations could exist for a perfectly competitive firm in the short run. In each case, explain whether the firm should produce in the short run, shut down in the short run, or whether additional information is needed to determine what it should do. a. Total costs exceed total revenue at all output levels. (4 pts) b. Marginal revenue exceeds marginal cost at the current output level. (4 pts) C. Price exceeds average total cost at...
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC), and long-run average cost (LATC) curves of a typical perfectly competitive firm that uses only labour and physical capital to produce its product and the current market price (PⓇ). S/unit MC ATC LATC B Pa E Q1 Q2 Quantity a) How many units of output would the firm choose to produce in the short run? Explain. b) Is the firm making an economic profit...
8:55 1 18:24:19 Exit The figure below shows short-run average total cost curves for a firm under four different production technologies. Assume that there are only four different technologies that the firm could use. Price ATC ATC ATC. Q.9, Q. QQQ Q Quantity Refer to the figure above. The minimum average total cost to produce a quantity between QD and QF is achieved by using technology
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