What is the term for the price at which the firm makes only normal profits? A) Shutdown price. O B) Economic price. C) Breakeven price. D) Average price.
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- Which of the following statements is. NOT true? Compared to a firm with a higher marginal cost, a firm with a lower marginal cost will O produce less output. set a lower price but at a higher markup over marginal cost. O produce more output. Qearn higher profit.To maximize its profit, in the short run a perfectly competitive firm decides O A) how much advertising it should undertake. B) whether to increase the size of its plant. C) what price to charge for its product. D) whether to exit the market. E) what quantity of output to produce.The average variable cost (AVC) 1 and average total cost (ATC) of a price taker firm are provided below. According to this table, if the marginal revenue (MR) is $95, what decision should this firm take in the short-run? Quantity Average Variable Cost Averge Total Cosm 100 25 100 20 150 20 150 23 100 15 100 17 100 19 15030 150 19 150.25 11 O Exit the market Enter in to the market The firm will go for a temporary shutdown Continue production
- In the long run, a perfectly competitive firm makes O A) either a positive economic profit or a normal profit. B) zero accounting profit. C) zero economic profit. D) negative economic profit, that is, an economic loss. E) a positive economic profit.Graph below represents the cost structure of an individual firm in a perfectly competitive market. ATC MC 50 40 e AVC 30 20 10 8 10 11 12 Quantity (per day) a. Write down the break-even and the shut-down points (both corresponding quantities and prices) for this firm on the table below. quantity (q) Price (P) Break-even Point Shut-down Point b. If the price in this market is $50, find the profit maximizing output of firm A by explaining the profit maximizing condition for a perfectly competitive firm. Calculate total revenue, total cost, total variable cost and the profit of the firm at the profit maximizing output. Show your calculations If the price decreases to $25. C. i. Considering the short-run: would firm earn positive or negative profit in this new scenario? Would it continue operating or stop production? Explain your answer ii. Considering the long-run: would new firms enter to the market or would existing firms exit from it? What would happen to the market equilibrium?…For a burger seller Marginal, average variable and average total cost curves are attached below: 1. what is profit maximizing level of output and profit of this firm if the price of burger is $3.50? 2. Below what price will this firm shut down in the short run? 3. If the price was $4.50 ehat would be the firm's profit?
- Don't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?When price and marginal cost are equal for a perfectly competitive firm, the firm is O earning negative economic profit. maximizing economic profit. O maximizing total revenue. O minimizing average total cost.MENY Refer to the Figure under perfect competition. If P represents the market price for a price-taking firm, what is the best economic advice for the firm in the short run? Price P 0 MC ATC AVC -P-MR-AR 9 Quantity (firm) O Continue operating because average total cost exceeds price. O Shut down immediately. Continue operating because price exceeds average variable cost. Continue operating because average variable cost exceeds price.
- A perfectly competitive firm should shut down in the short-run if price falls below the minimum of A) average variable costs. B) marginal revenue. C) fixed costs. O D) average total cost. E) marginal cost.The accountants hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, Forever Fitness should O a. lower their prices to increase their profits. ●b. stay open because shutting down would be more expensive. c. stay open because the firm is making an economic profit. O d. shut down because staying open would be more expensive.QUESTION 1 If your fixed costs are $10,000, your variable costs are $10,000, and your revenue is $15,000, what do you do? You should shut down the firm. O You should shut down in the long run, but stay open in the short run. You shouldn't worry about profit. You should stay open. O You should follow the law of demand and cut your sales. QUESTION 2 If the elasticity of a product is -1, the best thing to do is: O drop the price O raise the price O leave it alone O bring the elasticity up to a positive number QUESTION 3 Game theory: O is used mostly in monopoly markets O never occurs when markets are in equilibrium helps a firm make strategy decisions considering the actions of other firms O is how consumers make rational economic decisions
