The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be greater than average total cost. The price of fertilizer must be greater than marginal cost. The price of fertilizer must be greater than average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Price and Costs 1 Firm Quantity (?) Demand P.- If firms in the market are producing output but are currently making economic losses, market, and indicates the corresponding supply curve. The quantity supplied by each firm will decrease. Average total cost will decrease. The price of fertilizer will increase. The total quantity supplied to the market will decrease. Marginal cost will decrease. Market I I Quantity I I I P1/P2 S₁ (?) illustrates the present situation for the typical firm in the S₂ Assuming the change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check S₁ pply.

The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be greater than average total cost. The price of fertilizer must be greater than marginal cost. The price of fertilizer must be greater than average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Price and Costs 1 Firm Quantity (?) Demand P.- If firms in the market are producing output but are currently making economic losses, market, and indicates the corresponding supply curve. The quantity supplied by each firm will decrease. Average total cost will decrease. The price of fertilizer will increase. The total quantity supplied to the market will decrease. Marginal cost will decrease. Market I I Quantity I I I P1/P2 S₁ (?) illustrates the present situation for the typical firm in the S₂ Assuming the change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check S₁ pply.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section12.3: The Various Measures Of Cost

Problem 3QQ

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Jeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. What is the break-even price and quantity? What is the shut-down price and quantity? If the price at which Jeannette can sell wheat is $16/bu., will Jeannette earn a profit in the short run? In the short run, should she produce or shut down? If the price at which Jeannette can…
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