Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 8, Problem 12SQ
To determine

 The profit of the firm producing below average total cost under perfect competition.

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A profit-maximizing firm in a competitive market is currently producing 500 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?
Which of the following will cause the purely competitive firm to stop operations?  A. the price can no longer cover the variable cost B. the price can cover the variable cost and half of the fixed cost C. the price can cover both the variable and the fixed costs but there is no economic profit D. the firm is realizing economic profit E. no correct answer
In the short run, a perfectly competitive firm can Select one: a. earn an economic profit. b. earn an economic profit, earn a normal profit, or incur an economic loss. c. earn a normal profit. d. incur an economic loss.
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