Under what conditions will a firm shut down temporarily? Explain.

Q: At what point does a firm in a perfectly competitive industry shut down? Explain with graph.

A: In a perfectly competitive industry, at the profit maximizing level of output, when the market price…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: “Even if a firm is losing money, it may be better to stay in business in the short run.” Is this…

A: Yes, in the short run, it may be better to run the firm even if it is losing money.

Q: Explain the fact that the short-run supply curve for a price taking firm is that segment of its…

A: The individual supply curve of short-run is the marginal cost of an individual at all of the points…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: The costs of production include both the fixed costs as well as the variable costs. The fixed costs…

Q: The shut-down point for a competitive firm is in the short run is where

A: In the short run the shut-down point for a competitive firm is in the is where the average…

Q: Do you agree with the following statement and explain why! "A firm that operates in a perfectly…

A: Perfectly competitive market is a market where there are many buyers and sellers in the market…

Q: Why do you think a firm in a perfectly competitive industry does not have market power?

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: According to the graph below, the firm doesn't make a profit when the quantity exceeds what value?…

A: Profit is the difference between the total revenue and and total cost.

Q: In a perfectly competitive industry, what mechanism that adjusts price to minimum long-run average…

A: Firms are considered perfect competition when these conditions happen: (i) the industry consists of…

Q: Revenue, Cost MC AC AVC E AR = MR R Output Which point in the diagram is the shut-down point for the…

A: The total cost incurred by a firm can be divided/split into two- fixed costs(TFC) and variable…

Q: Under what conditions should a competitive firm shut down in the short run?

A: In the short term, a corporation that operates at a loss (where the income is less than the overall…

Q: Refer to the diagram below:…

A: Answer - Shut Down Point - The point where firm is not able to recover there average variable cost…

Q: A profit-maximizing business incurs an economic loss of $$30,000 per year. Its fixed cost is $45,000…

A: Short run business decision: It is given that, it is a profit-optimizing firm that incurs an…

Q: In the short run, a perfectly competitive firm should continue to produce as long as it can cover…

A: In the short run, a perfectly competitive firm should continue production till price per unit is…

Q: Consider the graph below. Should this firm stay oper shut down in the short run and why? MC ATC* AVC…

A: Over the short run, firm must get variable cost recovered to stay open in the market. A firm will…

Q: If a perfectly competitive firm is making economic loses in the short run, on what basis the…

A: The economic losses refer to the situation that the total revenues are less than the total cost of…

Q: A firm in a perfectly competitive industry is maximizing its profits at 400 units of output. If the…

A: Perfectly competitive industry It refers to a industry in which there are large number of buyers and…

Q: Under what conditions will a firm shut down temporarily? Explain theoretically and graphically.

A: Firm would shut down temporarily,if it is not able to cover the fixed cost. For this,price has to be…

Q: Do you expect firms in perfectly competitive industries to have high profits in the short run? Why…

A: The perfectly competitive market is a form of market where unlimited no of buyer and seller exist,…

Q: Which of the following is true for a perfectly competitive industry?

A: option 3 is rhe correct answer The firm in industry produce standardized products  It's dentical…

Q: Why wouldn’t a firm just drop any product that isn’t selling inhigh enough volume to reach its…

A: While analysing producer’s equilibrium, break-even point is a no profit, no loss situation. That is…

Q: Consider a firm that has no fixed costs and that is currently losing money. Are there any situations…

A: If a firm has no fixed cost, the total cost of a firm is equal to the total variable cost, and…

Q: A firm will shut down in the short run if TR < TC P< ATC TR= TC P = MC P< AVC

A: The firm will shut down its operation in the short run if the firm is not able to meet its day to…

Q: he graph attached illustrates the Demand, Marginal Revenue, Marginal Costs, Average Total Costs and…

A: A perfectly competitive earns zero economic profit in the long run .Break even price is that price…

Q: opose Gwen's Country Curtains is currently producing 1000 curtains per month at a price of $80. In…

A: In monopolistically competitive market, the sellers sell differentiated products which are close…

Q: Using curves, graphically, a firm will shutdown if what? What is an output at which the firm makes a…

A: Economic profit refers to the excess of total revenue over total cost.  To calculate the economic…

Q: In a perfectly competitive market, please compare the short run and long run prices in an increasing…

A: Perfect competition refers to the market structure where there are a large of number of buyers and…

Q: Discuss where does the shutdown being and why? What does the company has to do to get back to…

A: The answer is given below

Q: A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What typels)…

A: In a perfectly competitive market there are large number of firms producing similar and identical…

Q: What is Product Expansion?

A: Product Expansion -It is the expansion of economic activity as well as the production levels from…

Q: Does a competitive firm’s price equal the minimumof its average total cost in the short run, in the…

A: A perfect competition(PC) market is one with many consumers and sellers producing identical…

Q: What is the short run Supply Curve for a competitive firm?

A: In perfect competition, the short-run supply curve is the marginal cost curve (MC) at and below the…

Q: What is the shutdown decision of the firm? How should a firm decide whether to continue business or…

A: For a perfectly competitive company, where the total revenue of the company, i.e. the product of its…

Q: An industry in which the long-run ATC continues to decline as firm size increases will likely become…

A: There exist different types of monopoly market structures. The common feature of the monopoly market…

Q: If any of your answers are negative, put a minus sign in front of the number. You are given the…

A: We know ,  TC = TFC + TVC  MC = TCn - TCn-1 TFC = AFC * Q TVC = AVC*Q TC = ATC*Q

Q: Should a firm shut firm if its revenue is R = $1,500 per week and: a. Its variable cost is VC =…

A: There are two types of cost in short run which are fixed and variable cost. The total variable cost…

Q: If a firm sells its output at a price greater than ATC, it will earn economic profit.   Is this…

A: A firm produces at a point where the marginal revenues are equal to the marginal costs.

Q: Describe a firm’s decision to shut down and when to exit the market,and explain the difference…

A: Perfect competition is a market structure that has a large number of buyers and sellers who have…

Q: c) Under what conditions will a firm shut down in the short run? Provide two plausible real world…

A: The firms, and organizations are viewed as significant for the legitimate working of the markets.…

Q: Decide whether a firm making short-run losses should continue to operate or shut down its…

A: In the short-run, a profit-maximizing firm will continue producing a positive amount of output even…

Monopoly Market

When a company and its products dominate a sector or an industry, it is termed a monopoly. When a firm and its products control a market, then it is called a monopoly.