26. Which of the following stat a. It is something that all firms actually do. b. It is something which economists believe that all firms actually do. C It is what economists believe is the most common aim of firms. d. It means that no firms ever make losses.

26. Which of the following stat a. It is something that all firms actually do. b. It is something which economists believe that all firms actually do. C It is what economists believe is the most common aim of firms. d. It means that no firms ever make losses.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 19RQ: How does the average cost curve help to show whether a firm is making profits or losses?

See similar textbooks

Related questions

Q: 1. An entrepreneur is thinking of starting a firm. The firm will pay Tk. 320,000 in wages/salary,…

A: Accounting profit, also referred to as bookkeeping profit or financial profit, is net income earned…

Q: Suppose a farmer in Georgia begins to grow peaches He uses $1,000,000 in savings to purchase land,…

Q: The data in the below table shows the production and costs of certain firm, use the table to answer…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: what is the profit or loss at the profit maximizing output?

A: Profit maximizing level is where MC= MR. This is at P= $40 and Q= 200. Given ATC is less than…

Q: (Figure: Profits)How much profit is the firm making at the profit-maximizing quantity?…

A: The price charged by the firm is $10, at this price the quantity produced is 100 units. Profit is…

Q: How much should the firm produce to maximize its profit? What is the firms AR? What is the firms…

A: "Since you have asked multiple parts, we will answer only first three parts for you. If you have any…

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: The data in the below table shows the production and costs of certain firm, use the table to answer…

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

Q: What two lines determine whether a firm is making positive or negative or zero profits?

A: Introduction The perfect competitive firm only needs to decide on one thing: how much to make. To…

Q: H) The lona College intern suggests that the company should increase the number of sweatshirts it…

Q: 3. The bicycle industry consists of seven firms. Firms 1, 2, 3, each has 20% of the market share,…

A: Number of firms= 7 firms Market Share of 1,2, and 3 firm= 20% Market share of 4, 5, 6, and 7= 10% a)…

Q: What is Law of Diminishing Return? Explain and show it with graph.

A: Microeconomics: It refers to the economics in which the study is considered on an individual not on…

Q: Wells Fargo was the darling of the US banking industry, with some of the highest returns on…

A: The banking sector is important for a particular economy. The central bank is the head followed by…

Q: MC АТС 20 -MR 16 30 40 Firm What is the amount of profit for the firm in the graph?

A: A Firm will be in equilibrium when its profit is maximized or loss is minimized. For this following…

Q: 1. Complete the following table and identify the quantity that maximizes profit. Quantity TR MR TC…

A: To complete the table , we need the relationship between i) Total Revenue( T R )and Marginal…

Q: 3. The graph below gives the marginal profit P'(x) for a company when it produces x products. P'(x)…

A: Given,

Q: A. What do we mean when we say that a firm is a perfect competitor in the product and factor…

A: Perfectly Competitive Factor Market: This indicates that the factor of production (say labor), the…

Q: 21. Sandy owns a firm with annual revenues of $1,000,000. Wages, rent, and other costs are $900,000.…

A: a. Accounting profit can be calculated as follows: Accounting profit=1,000,000-900,000=100,000…

Q: what is the profit maximization rule and how we can draw the graph and comments of MR AR curve

A: Profit maximization is the parameter by which a firm determines the price, input and output levels…

Q: Refer to the following table: Quantity (Bushels) (Q) Total Revenue Marginal Revenue (MR) Marginal…

Q: 3 examples of perfectly competitive markets and dose these firms profit in long run or short run

A: Perfect competition refers to the type of market structure where the firms are able to sell…

Q: a. What is the profit-maximizing level of output?

A: The main objective of every firm is to maximize their profits. Profits are calculated by taking the…

Q: Define economic efficiency in terms of production costs and products prices. Why are purely…

A: * ANSWER :-

Q: The following data refers to the revenue and costs (in million rupees) of a firm. Output (units)…

A: Answer:-

Q: Graph Analysis: Use the graph below for the following questions... MC ATC AVC D-MR AR $10 $8 $7 $6…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: You are currently in a job as a chef in a restaurant earning $100,000 per year. You are considering…

A: Note – As you have posted question with multiple parts, the answer to only first three subparts is…

Q: C. Fill in the average revenue and marginal revenue in the table. Output (Q) Total Revenue (TR)…

A: The sum of money generated per unit of output is referred to as average revenue. In other words, it…

Q: 2. The table below shows information of 5 different competitive firms. What would those firms do in…

A: Shut down rule suggests that in the short run when price is less than average variable costs, the…

Q: 12. Bob's Barbershop manager has calculated the marginal revenue is Ksh 200 and marginal cost is…

A: 12) Given: Marginal revenue = Ksh 200 Marginal cost = $250 Aim = Profit maximization We can…

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: 24.Use the graph to answer the question Where on the graph would firms be experiencing diseconomies…

A: Ans. Diseconomies of scale are a situation of cost disadvantage when a firm changes its size of…

Q: A. Explain, how or why the commodity (say bottled water) market can be considered as a good example…

A: A commodity market is a market that trades in the primary economic sector rather than manufactured…

Q: What is the meaning of 'acceptable loss' for a perfectiý competitive firm ? Draw a graph and…

A: Answer in Step 2

Q: Pice 100 90 80 ATC 70- 30- 40 36 30+ 20 10 MR 12 16 20,4 20 32 Duaatiy Refer to Figure 16-12. If…

A: We have downword sloping demand curve of a firm. So its a profit maximizing firm.

Q: What is brand equity? List the components of brand equity, and describe how they provide value to…

A: The premium value helps the company in generating a value of its own when it is compared to the…

Q: a. What is the profit maximization rule? That is, how do the firms decide how much to produce and…

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: Do you think firms really try to maximize profits? Do firms (especially small ones) know what prices…

A: Economist generally assume that firms act as profit maximisers. Economists don’t think there’s…

Q: 150 120 Marginal Revenue 30 -30 3 6 9 12 15 21 24 27 30 QUANTITY (Units) Comparing your total…

A: Total revenue is the product of price and output. Marginal revenue is the additional income in…

Q: Explain the difference between a firm's revenue and its profit. Which do firms maximize?

A: Revenue is the total amount received by selling the required units of goods or services. Profit is…

Q: 6. Suppose that you have the data for the three firms below. What is HHI in this case? Firm Sale 500…

A: HHI=∑1NFi2Where, HHI=Herfindahl–Hirschman indexand, F= Number of firms

Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?

A: Answer - In the long run where the every input can vary and as in the long run where firms can make…

Q: Use the data in the table to find the marginal cost of producing the 6th units of output. Q P TC TR…

A: Marginal cost refers to the additional expenses incurred when one more unit of output is produced by…

Q: Explain how firms that compete in the four different market structures determine profitability. Use…

A: There square measure quite {an} few exclusive market systems which could characterize an economy.…

Q: Quantity TR MR TC MC 0 0 - 5 - 1 10 2 2 20 15 3 30 10 4 10 37 Complete the following…

A: Marginal revenue is the change in total revenue per unit change in output. Marginal cost is the…

Question

26. Which of the following stat
a. It is something that all firms actually do.
b. It is something which economists believe that all firms actually do.
C It is what economists believe is the most common aim of firms.
d. It means that no firms ever make losses.

Expert Solution

Step 1

26) Profit maximization is the ability of company to be able to make maximum profit with lowest operating expenses and it is the main aim of any business. The Profit maximization rule says that if a business selects to maximize its profits, it must select that level of output where its marginal cost is equal to its marginal revenue.

Step by step

Solved in 2 steps

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

26. Which of the following statements about profit maximization is true? a. It is something that all firms actually do. b. It is something which economists believe that all firms actually do. C It is what economists believe is the most common aim of firms. d. It means that no firms ever make losses.
a.What does shirking (goofing off) mean for firms and why is it a problem? b. What is the most effective method of reducing or eliminating shirking and why?
What is the firms profit or loss?
Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?
32. What is the definite rule to maximize profit? Explain.
10. Read this excerpt from the October 18, 2022, Wall Street Journal. KINDERHOOK, N.Y.—Golden Harvest Farms has grown from a small apple-growing operation when Doug Grout’s grandfather opened it after World War II, to a multipronged business that includes a retail stand, cider press, distillery, tasting room and barbecue restaurant. But Mr. Grout said he sees a cloudier future for the business due to new state regulations that will require him to increasingly pay more overtime to the farmworkers who pick his apples in the coming years, raising one of his primary costs. “We were looking to buy another orchard, and that whole thing is tabled,” said Mr. Grout, 52 years old, who co-owns Golden Harvest with his father, as he drove between rows of Honeycrisp trees. “We’re stepping away. You’re going to see farms go out of business. This is very shortsighted.” For the apple market in New York, the new regulations will: Cause supply to shift to the left, leading to higher prices and a…
Sleek sneakers is one of many firms in the market for shoes. a. Assume that sleek is currently earning short run economic profit. On a correctly labeled diagram, show Sleek's profit maximizing output and price as well as the area representing the profit. b. What happen to Sleek's price, output and profit in the long run? Explain this change in words and show it on a new diagram. c. Suppose that overtime consumers become more focused on stylistic differences among shoe brands. How would this change in attitudes affect each firm's price elasticity of demand? In the long run, how will this change in demand affect Sleek's price, output and profit? d. At the profit maximizing price you identified in part (c), is Sleek's demand curve elastic or inelastic? Explain.
3. Suppose that ABC company plans to build a subway train to provide better alternatives for Filipino commuters to avoid heavy traffic and delay during rush hour. Apparently, the subway can last up to 50 years only that its cost $ 5.5 million to build it. Assuming that it cost nothing for its maintenance. Consider the table below that shows potential demand of the subway train of the ABC company. For now, disregard the potential variety of the passenger's demographic.
What is the firm's profit?
How does the average cost curve help to show whether a firm is making profits or losses?
What two lines determine whether a firm is making positive or negative or zero profits?
2. On the other hand, the General Motors went on a different direction. General Motors was founded in 1908 and one hundred years old company. Following the financial crisis in 2008/2009, General Motors filed for chapter 11 bankruptcy protection. After support from the US government and restructuring, the business operation was able to re-enter the market. In your ECON 200 class you learnt the conditions at which the firms enter and exit from the market. Using a graph describes how and when in a perfectly competitive market the firms that are experiencing economic losses close the operation and reenter to the market. In the graph you may use costs and revenue curves.