1.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. A. The price of fertilizer must be less than marginal cost. B. The price of fertilizer must be equal to average variable cost. C. The price of fertilizer must be less than average total cost.
1.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. A. The price of fertilizer must be less than marginal cost. B. The price of fertilizer must be equal to average variable cost. C. The price of fertilizer must be less than average total cost.
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.1P
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1.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.
A. The price of fertilizer must be less than marginal cost.
B. The price of fertilizer must be equal to average variable cost .
C. The price of fertilizer must be less than average total cost .
2. If firms in the market are producing output but are currently making economic losses,_________ illustrates the present situation for the typical firm in the market, and_________ indicates the corresponding supply curve.
Assuming there is no 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 all that apply.
A.The quantity supplied by each firm will decrease.
B.The total quantity supplied to the market will decrease.
C.The price of fertilizer will increase.
D.Marginal cost will decrease.
E. Average total cost will decrease.
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