A marginal cost curve intersects average total cost at $6. This curve also intersects average total cost at $9.a. It is most accurate to say this firm will generate a lossat any pricebelow $6below $9above $9above $6c. Which of the choices best explains why this price willcause the firm to shut down instead of continuing tooperate at a loss?O O O O Ototal revenue > total variable coststotal revenue > total fixed coststotalrevenue < total variable coststotal revenue < total fixed coststotalvariable costs < total fixed coststotal variable costs > total fixed costsb. At what price level will this firm shut downimmediately, with certainty?Any price below $9Any price above $9Any price below $6Any price above $6

Marginal cost The change in overall cost whenever the quantity produced increases by one unit is…

A marginal cost curve mersects average total cost at po. This curve also intersects average total cost at $9. a. It is most accurate to say this firm will generate a loss at any price below $6 below $9 above $9 above $6 b. At what price level will this firm shut down immediately, with certainty? Any price below $9 Any price above $9 Any price below $6 Any price above $6

A marginal cost curve mersects average total cost at po. This curve also intersects average total cost at $9. a. It is most accurate to say this firm will generate a loss at any price below $6 below $9 above $9 above $6 b. At what price level will this firm shut down immediately, with certainty? Any price below $9 Any price above $9 Any price below $6 Any price above $6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following costs of a typical firm in a purely competitive industry. The firm has no fixed costs (average total cost = average variable cost). Average Total Cost Quantity Marginal Cost 1 $28.00 2 20.50 $13.00 3 16.67 9.00 4 15.25 11.00 16.00 19.00 6 18.83 33.00 a. Given only the information available, what would you expect product price to be in the long run? O $11.00 O $19.00 O $16.00 O $15.25 b. What would you expect price to be in the short run? O $9.00 O $13.00 O $11.00 O $19.00
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(Figure 10-3)What is the maximum economic profit this firm depicted in Figure 10-3 will be able to earn? Group of answer choices $600 $200 $400 $0
Assume the following total cost schedule for a perfectly competitive firm. Output TVC (S) TFC ($) 100 1 40 100 2 70 100 3 120 100 180 100 250 100 6. 330 100 TABLE 9-1 Refer to Table 9-1. If the firm is producing at an output level of 6 units, the ATC is and the AVC is Select one: a. $71.67: $55 b. $38.33: $16.67 C $55: $16.67 d. $55: S80 e. $80: $55
Why is the equality of marginal revenue and marginal cost essential for profifit maximization in all market structures? Explain why price can be substituted for marginal revenue in the MR = MC rule when an industry is purely competitive.
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Answer Question 6
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