3. Consider the following diagram: ATC MC ive AVC P-D-MR Quartity Would a perfectly competitive firm facing these conditions stay in business in the short run? Demonstrate your answer on the graph by comparing the loss if it stayed open to the loss if it closed. Hint: don't forget that ATC- AVC AFC. 4. You own four firms that produce different products. The following table summarizes the conditions in each firm. First, calculate the missing numbers for each firm and fill in the table. AVC MC ATC Firm TC MR TR 200 20 1.5 100 32.5 200 70 10 8 Now, based on the table, match up each firm with one of the following four decisions (i) decrease output (ii) shut down (ii) increase output (iv) continue producing the same output level A: Principles of Microeconomics, p
3. Consider the following diagram: ATC MC ive AVC P-D-MR Quartity Would a perfectly competitive firm facing these conditions stay in business in the short run? Demonstrate your answer on the graph by comparing the loss if it stayed open to the loss if it closed. Hint: don't forget that ATC- AVC AFC. 4. You own four firms that produce different products. The following table summarizes the conditions in each firm. First, calculate the missing numbers for each firm and fill in the table. AVC MC ATC Firm TC MR TR 200 20 1.5 100 32.5 200 70 10 8 Now, based on the table, match up each firm with one of the following four decisions (i) decrease output (ii) shut down (ii) increase output (iv) continue producing the same output level A: Principles of Microeconomics, p
Chapter12: Firms In Perfectly Competitive Markets
Section: Chapter Questions
Problem 12P
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