When will a business shut-down in the short-run?

Q: Explain various markets and how they work to your friend so your friend will be able to run the…

A: Mainly there are 4 types of market structures. These are:  Perfect Competition(PC) is the structure…

Q: In the long run

A: In the long run firms get more power to change inputs.

Q: Explain how short-run economic profits become long-run economic costs. When profits fall to zero,…

A: A stopwatch or a calendar cannot correctly identify the boundary between the short and long runs. It…

Q: the new equilibrium point in the short run

A: AS curve shifts when the factors affecting aggregate supply changes. It will shift to right when the…

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: In doorknob manufacturing industry, you observed that the firms are making losses. In the long run…

A: In doorknob industry, when the firms are making losses, some firms will exit the market. In the…

Q: Should Tim want to maximize his profit in the short-run, how many t-shirts will he produce?

A: Given that the market structure is monopolistic competition, the profit maximizing condition is  MC=…

Q: Why do economists believe that economic profit is the more accurate measure of a business success?…

A: Accounting profit only considers the cost that has actually happened, but economic profit considers…

Q: Do entry and exit occur in the short run, the long run, both, or neither?

A: In the short run, the firms have one or more fixed factors of production. The firms cannot change…

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: Why would a profitable for-profit organization choose to exit a line of business

A: A for-profit firm or organization is described as an entity that mainly generates profit more than…

Q: In the short run, what quantity does Lite and Kool produce, what price does it charge, and does it…

A: Monopolistic competition refers to a market structure in which many firms sell differentiated…

Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?

A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…

Q: What is the difference between Economic Profit and Accounting profit?

A: Explicit Cost is the cost paid to factors of production that are hired from outsiders. Implicit Cost…

Q: what tools and techniques are available to improve a firm's profits?

A: There are many tools and techniques available which is used by the firm to improve profit.Following…

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

A: One of the classifications of a firm’s costs is fixed cost (FC) and variable cost(VC). Fixed costs…

Q: Why would a firm that incurs losses choose to produce rather than shut down? Why could this choice…

A: In short run firm exhibits return to factor where only one factor is variable and another factor is…

Q: How can we Determine Accounting Profit?

A: Profit is the income that the fourth factor of production, i.e. enterprise, generates from an…

Q: How did you get the perfect competition values

A: Perfect competition market is that market where large number of buyers and sellers of the commodity…

Q: Suppose a resturant in a city making above normal profit in the short run. How will the market…

A: A restaurant is operating in a monopolistic competitive market structure.

Q: What is the shut-down condition? a..A condition stating when a firm should cease to operate and…

A: A firm shuts down and stops producing in the short run, if it can't cover its revenue using its…

Q: If you're a manager in a highly competitive business such where should you put your most effort to…

A: As a manager ,the primary responsibility is to look in the profits of the business. Business can be…

Q: What is meant by normal profit?

A: The total revenue earned by a firm operating in a market is the sum of payments received from the…

Q: Why do more sales in not equal more profit

A: An expansion in deals/sales doesn't generally prompt an increment in benefit.  Most organizations…

Q: Why does exit occur?

A: When the firms earn less than their total cost of production, they make loss. If existing firms in…

Q: In perfect competition market, Firms have perfect knowledge of market. What does that mean?

A: A perfect competitive market structure has many buyers and sellers. All the firms are the price…

Q: Describe the methods that can be used to to determine where profit is maximized?

A: A firm in short run and long run chooses to maximize its profits. Output levels of the firm are…

Q: What is the firms profit or loss?

A: Since the marginal revenue of the firm is above the average total cost and the marginal cost the…

Q: In order to maximize the profit, what decision do you think is the most important one?

A: Note:  We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Can you give examples of companies with perfect competition?

A: The markets refer to the place where the buyers, and sellers interact. In the markets, the sellers…

Q: What is the difference between economic profit and accounting profit?

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: What is the firms profit or loss?

A: A firm in an exceedingly competitive market wants to maximise profits similar to the other firm.…

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: In microeconomics long run equilibrium will prices rise or fall

A: The long-run equilibrium(eqm) in microeconomics is at the point where price(P) is equal to the…

Q: What is Product Expansion?

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

Q: What is the shutdown condition? a.A condition stating when a firm should cease to operate and…

A: The shut-down condition is applicable for short run, where a firm stops production if its revenue is…

Q: Explain profit ?

A: The average sales price multiplied by the number of units sold equals revenue. Net income is…

Q: A firms total profit equals?

A: The amount of money a company makes by selling its goods or services at a specific price is revenue.…

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: How does a change in the response rate affect profit?

A: A response rate refers to a rate that shows the number of people or participants who have responded…

Q: When a firm takes the short-down decision?

A: Shut down is a situation when it is better for the firm not to produce instead of producing.