QUESTION 32 Which of the following is not a decision made within the context of the long run: a. the shut down decision Ob. the decision of whether to enter into a market c. the expansion/contraction decision (.e. the decision whether to expand or contract) d. the decision regarding a change in the scale of operations e. all of the above are decisions made in the long run
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- A breakfast place, a perfectly competitive eatery, sells its special for $5. Cost of waiters, cooks, and power average out to $3.95 per meal; cost of lease, insurance and other expenses average out to $1.25 per meal. What should this owner do. A)close her doors immediately b)continue producing in the short and long run c)continue producing in the short run, but plan to go out of business in the long run if price does not increase in the future d)raise her prices above the perfectly competitive level e)lower her outputDuring the summer, Alex runs a mowing service, and lawn mowing is a perfectly competitive industry. In the short run, Alex will shut down if: O the total revenues can't cover variable costs. O the price exceeds the average total cost. O the total revenues can't cover foxed costs. OI the total revenues can't cover total costs.Pretzel stands in New York City are a perfectly competitive industry in long-runequilibrium. One day, the city starts imposing a $100 per month tax on each stand.How does this policy affect the number of pretzels consumed in the short run and thelong run?a. down in the short run, no change in the long runb. up in the short run, no change in the long runc. no change in the short run, down in the long rund. no change in the short run, up in the long run
- 1. With a new understanding of economic analysis, Corn Mart, wants your opinion on what to do. Currently, they are producing 7 bushels of corn per day. The corn market is very competitive in your city – therefore, it is perfect competition. The market price is $4. а. Fill in the blanks. All numbers are daily measurements Variable Total Output Fixed Cost AFC Cost AVC Cost АТС MC MR 1 10 1.20 X 2 3.00 4.00 4 6.50 9.00 6. 12.00 15.50 8 19.50 9. 26.00 10 33.00 a. Is producing 7 bushels of corn a good idea? Or, should they produce a different amount? If sU, Now manyPlease answer all 1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred Group of answer choices a. Sunk costs b. Average costs c. Opportunity costs d. Marginal costs 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer…When are you are you expecting companies to produce in the short run?A. costs equal equal revenueB. price equals marginal revenueC. Average costs equal marginal costsD.marginal revenue equals marginal cost
- You are the manager of a taco truck that is in a perfectly competitive industry comprised if identical firms. The cost of taco ingredients increases form $15 to $20 per hundred pounds. a. In the short run, how do you respond to the increases in the price of ingredients? b. Describe the long-run adjustments that take place in the market place. c. What long-run decisions will you make as the manager of your firm?Question What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a C d Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should…2) Explain the relationship between short run ATC and MC and why ATC is U-shaped in short run? 3) Explain equilibrium of the firm under perfectly competitive market by choosing output level at which a. P=MC=MR and Firm is making zero economic profit b. P=MC=MR and Firm is making a loss c. Explain shut down rule with the help of graph 4) Define the price elasticity of demand and explain its role to predict changes in quantity and total revenue
- (1) Use the graph to answer the question below. The quantity is measured in thousands of units. What will this firm decide to do in the long run? A-It will stay in the market because the price is above its AVC at its profit-maximizing output. B-It will leave the market because the price is below its ATC at its profit-maximizing output. C-It will increase its price to point B to earn normal profit. D-It will increase its output until its profit-maximizing output level is equal to B. E-Insufficient data to determine. (2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do? A-Produce more milk. B-Produce less milk. C-Shut down in the short run. D-Operate in the short run and leave the industry in the long run. E-Insufficient information to determine (3) A firm operating in a perfectly competitive market cannot…35. Franklin is a fiddlehead farmer. He sold 10 bags of fiddleheads last month; his total unavoidable fixed cost FC was $100 and total variable cost VC $80. Given the competitive market price P = $15 per bag, Franklin A. Made the right decision by staying in business last month.B. Made a wrong decision last month as it suffered a loss of $30.C. Was in the long run competitive equilibrium last month.D. Faced more competition in the market due to the entry of new firms in the long runIn a perfectly competitive industry, what mechanism that adjusts price to minimum long-run average total cost? a. Entry and Exit b. Diseconomies of Scale c. Superior Management d. Economies of Scale