help with this question If a competitive firm finds that its average variable cost is decreasing at its current profit maximizing quantity, should the firm increase or decrease output?
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Please help with this question If a competitive firm finds that its average variable cost is decreasing at its current profit maximizing quantity, should the firm increase or decrease output?
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- At what output rate does the firm maximize profit or minimize loss?The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5According to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?
- In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?What is the relationship between marginal cost and the short-run supply curve for the purely competitive firm?In the short-run, if the marginal cost of a firm in a competitive industry is increasing while its average variable cost is downward sloping, what can you say about slope of average total cost?
- Suppose that the market for black sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (? 50 45 40 35 30 ATC 25 20 15 AVC 10 MC 8 10 2 4 12 14 16 18 20 QUANTITY (Thousands of sweaters) PRICE (Dollars per sweater)Homework (Ch 14) 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 60 50 40 30 AVC 20 MC 10 20 25 30 35 40 45 50 10 15 QUANTITY (Thousands of ovens) PRICE (Dollars per oven)50 45 40 35 30 ATC 25 20 15 AVC 10 MC 2 4 8 10 12 14 16 18 20 QUANTITY (Thousands of shirts) PRICE (Dollars per shirt)
- Economics QuestionAssume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?For the following, decide whether you agree or dis-agree and explain your answer: a. A firm earning positive profits in the short run always has an incentive to increase its scale of operation in the long run. b. A firm suffering losses in the short run will continue to operate as long as total revenue at least covers fixed cost.
