Which of the following is true about firms exiting a perfectly competitive market? Select the correct answer below: O The price where firms exit the market shows the price where the firm would lack enough revenue to cover its variable costs. Firms are only concerned with what quantity to produce and will exit otherwise, even if they are not experiencing losses. O Exiting the market occurs in response to a sustained pattern of losses. O Exiting the market occurs in response to increased industry profits.

Which of the following is true about firms exiting a perfectly competitive market? Select the correct answer below: O The price where firms exit the market shows the price where the firm would lack enough revenue to cover its variable costs. Firms are only concerned with what quantity to produce and will exit otherwise, even if they are not experiencing losses. O Exiting the market occurs in response to a sustained pattern of losses. O Exiting the market occurs in response to increased industry profits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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.
A mattress company operates in a perfectly-competitive environment. If the firm can increase its profits by increasing output, O price is greater than marginal cost. O price is less than marginal cost. O price is equal to marginal cost. losses are minimized.
Is my answer correct? i think you need information about the AVC to answer this question. I know the firm is productive at a loss, but in order to decide whether or not the firm should shut down, you have to know whether or not price is above or below AVC, right?
I need solutions of C, D, E. Thank in advance.
Don't used pen paper
Tara sells her organic carrots in a perfectly competitive market for a price that is just higher than her minimum average variable cost (AVC) of production, but lower than her minimum average total cost (ATC) of production. Which of the following statements is then TRUE? O She is incurring a loss because price is less than ATc. O She can minimize her losses by shutting down her operations now. O Although she is currently incurring a loss, she could restore profitability by advertising her carrots. She is carning a profit because price is above AVC.
P P₂ B C Q₂ D MC Firm entry occurs. Output Quantity Refer to the above figures for the typical firm in a competitive market. If the market demand curve is D3, what happens in the long run? A Firm exit occurs. ATC Most firms do nothing. D₂ Some existing firms increase capital input. D₂ D₁ Quantity
Question 18 Suppose a perfectly competitive firm faces the following situation: P = $10, output= 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? = O The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. The firm earns a profit but should decrease output to maximize its profits.
Consider the perfectly competitive market for tofu. Tofu production requires special inspections because of potential allergic reactions in consumers. Starting from long-run equilibrium, show graphically what happens in the short and long run to q. Q, P, and it in the market for tofu (in comparison to the starting point) if the US government decides to impose less stringent inspection requirements before any production can actually start.
Explain whether the statement is valid on not. There are perfect knowledge among the buyers and sellers in a perfectly competitive market
Looking to see how to resolve
Which of the followings is the basic trait of a Perfectly Competitive market? The market has only one seller The products of the firms are differentiated. There are barriers to entry for firms outside the market. O There are numerous firms operating in the market. O A perfectly competitive firm is not productive efficient.