A perfectly competitive firm maximizes its profit by producing the output at which its marginal cost equals its Select one: a. average variable cost. b. marginal revenue. c. average total cost. d. average fixed cost.
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- If a profit-maximizing, competitive firm is producing a quantity at which marginal cost is between average variable cost and average total cost, it will A. keep producing in the short run but exit the market in the long run. B. shut down in the short run but return to production in the long run C. shut down in the short run and exit the market in the long run. D. keep producing both in the short run and in the long run.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 outputWhat are some characteristics of perfect competition? Is the Banana market a perfect competition? When you are buying bananas, what is your decision making process? Do you have any favorite brand of banana? How can companies in the market compete? Please name some other examples of perfect competition?
- Everett also works in the perfectly competitive manicure industry. The market price is $20 and he does 15 manicures a day. Given that his average total cost is $22, his total revenue is $300, and fixed costs are equal to $150, we know that Everett's Select one: a. average profit is - $4.00 b. average variable cost is $12 c. marginal revenue is $22 d. average fixed cost is $1.33If a firm in a perfectly competitive industry experiences persistent losses, in the long run it should A. exit the industry. B. continue to operate if it can raise the demand for its product through advertising and quality improvements. C. shut down temporarily and wait for market conditions to change. D. raise its price to cover average total cost.Would a firm earning zero economic profit continue to produce, even in the long run? In long-run competitive equilibrium, a firm earning zero economic profit A. will not continue to produce because this return is not covering its opportunity costs. B. will not continue to produce because it would be better off shutting down. C. will not continue to produce because such profit corresponds with negative accounting profit. D. will continue to produce because such profit is as high a return as could be earned elsewhere. E. will not continue to produce because it could earn a better return in another industry.
- In Long-Run Competitive Equilibrium it is included as a cost and are not included in economic profit. a. profit maximization b. zero profit condition c. normal profit d. none of thisA profit-maximizing firm in a competitive market is currently producing 500 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?In the short run, a perfectly competitive firm can Select one: a. earn an economic profit. b. earn an economic profit, earn a normal profit, or incur an economic loss. c. earn a normal profit. d. incur an economic loss.
- i. Calculate the marginal cost, marginal revenue and profit for each unitof production. ii. How many units should the firm produce to maximise profit?If you are a manager in a highly competitive business such where should you put your most effort to maximize profit? Pricing or cost cutting, please explain?Consider the following data: equilibrium price = $7.50, quantity of output produced 100 units, average total cost = $9, and average variable cost = $8. What will the firm do and why? = a. Shut down in the short run, because price is below average variable cost. b. Shut down in the short run, because price is below average total cost. c. Continue to produce in the short run, because price is greater than average variable cost. d. Continue to produce in the short run, because firms are always stuck with having to produce in the short run.