EBK MANAGERIAL ECONOMICS
4th Edition
ISBN: 9780100546622
Author: FROEB
Publisher: YUZU
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Question
Chapter 9, Problem 7MC
To determine
Profit.
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Students have asked these similar questions
Consider the following data: equilibrium price = $7.50, quantity of output produced
100 units, average total cost = $9, and average variable cost = $8. What will the
firm do and why?
=
a. Shut down in the short run, because price is below average variable cost.
b. Shut down in the short run, because price is below average total cost.
c. Continue to produce in the short run, because price is greater than average
variable cost.
d. Continue to produce in the short run, because firms are always stuck with
having to produce in the short run.
I.
A company produces at an output level where marginal cost is equal to marginal revenue
and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?
a. Shut down.
b. Continue to produce because the loss is less than the total fixed cost.
c. Increase production to lower the marginal cost.
e. Raise the price.
II.
At current long-run production levels, the marginal revenue of a competitive firm is $15 and
the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should
a. cut back on production.
b. stop production all together.
c. produce more.
d. continue producing at current levels.
In a perfectly competitive market, each firm has the cost function: q 2+10q+100. The price in the market is $50.
a. What is the Marginal Cost for the firm?
b. What is the Profit Maximizing Output?
c. What is the Total Profit the firm receives?
d. Should this firm continue to produce in the short run? Please explain.
e. If the price is $20, should the firm continue to produce? Please explain.
Chapter 9 Solutions
EBK MANAGERIAL ECONOMICS
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Similar questions
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