Refer to the following information about 3 hypothetical perfectly competitive firms' costs at their profit maximizing outputs. For each firm answer the listed questions. Firm 1 Firm 2 Firm 3 Price = Price $150 Price = $150 $150 ATC= $160 ATC = $160 ATC= $140 AVC = $130 AVC = $155 AVC = $130 1. Will each of these firms earn economic profit, break-even or incur losses? Explain why and show your work. 2. Calculate the per-unit profit or loss if there is any for each firm. Show all your work. 3. Will each of these firms make a decision to continue production at the current output or will make a decision to shut-down. Explain why. Paragraph v в I U 12pt v

Refer to the following information about 3 hypothetical perfectly competitive firms' costs at their profit maximizing outputs. For each firm answer the listed questions. Firm 1 Firm 2 Firm 3 Price = Price $150 Price = $150 $150 ATC= $160 ATC = $160 ATC= $140 AVC = $130 AVC = $155 AVC = $130 1. Will each of these firms earn economic profit, break-even or incur losses? Explain why and show your work. 2. Calculate the per-unit profit or loss if there is any for each firm. Show all your work. 3. Will each of these firms make a decision to continue production at the current output or will make a decision to shut-down. Explain why. Paragraph v в I U 12pt v

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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