Shut down point in the short run.

Question

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Answer 1

Question

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

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Answer 2

Question

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

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Answer 3

Question

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 6

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 7

Chapter 59, Problem 1CYU

a)

To determine

Shut down point in the short run.

Answer 8

a)

Expert Solution

Answer to Problem 1CYU

Point F is the shutdown point. The firm shut down immediately when the marginal cost curve cuts the average variable cost curve and MC must be rising.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

A firm will continuously produce when the marginal cost is less than the average variable cost but firmly stop its production when the marginal cost equates average variable.

Answer 13

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 1

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 14

b)

To determine

The firm operates in the short run despite sustaining a loss.

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 15

b)

To determine

The firm operates in the short run despite sustaining a loss.

Answer 16

b)

Expert Solution

Answer to Problem 1CYU

Point A where the firm operates in the short run despite sustaining a loss.

Answer 17

b)

Expert Solution

Answer 18

b)

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

At the Y output level, the firm sustains in the market despite the loss and at this level, marginal cost is higher than the average variable cost and price is less than the average variable cost.

Answer 21

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 2

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 22

c)

To determine

The firm operates while making a profit.

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.

Answer 23

c)

To determine

The firm operates while making a profit.

Answer 24

c)

Expert Solution

Answer to Problem 1CYU

Point B is where the firm operates while making a profit.

Answer 25

c)

Expert Solution

Answer 26

c)

Expert Solution

Answer 27

Expert Solution

Answer 28

Explanation of Solution

Firms earn profit where marginal cost is less than average variable cost. At this level, marginal cost is rising but the average cost curve is decreasing.

Answer 29

Economics Concept Introduction

Introduction:

Krugman's Economics For The Ap® Course, Chapter 59, Problem 1CYU , additional homework tip 3

In the short run, the average variable cost curve and the average total cost will be U-shaped whereas the marginal cost curve would be swoosh shaped. The average total cost curve would be above the average variable cost. The marginal cost curve cuts the average total cost at its minimum level.