A manager makes the statement that output should be expanded as long as average revenue exceeds average cost. Does this strategy make sense? Explain.

Q: An ice cream shop owner is deciding whether or not to keep her ice cream shop open during the…

A: Fixed costs are defined as the costs incurred at the time of setting up of the business such as…

Q: Costs and Revenue MC ATC AVC Quantity Discuss the firm plotted on the figure. What type of firm do…

A: Under a perfectly competitive market, firms sell goods that are identical. There are a large number…

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: A profit-maximizing firm in the short run will expand output а. until total revenue equals total…

A: A profit-maximizing firm produces a level of output at which it is a le to get maximum Profit and…

Q: You own a printing firm. Two of your senior managers provided you with advice. The first manager…

A: The profit of a firm is calculated by subtracting the total costs incurred on production from the…

Q: A firm should shut down in the short run if it is not covering its

A: To find : When should firm shut down.

Q: How much profit or loss does the firm make at the selected output level?

A: The additional cost incurred in the manufacturing of one more unit of a good or service is known as…

Q: In the ice cream industry, in the short run, what cost includes the cost of cream and sugar, but not…

A: The marginal cost-  is the difference in overall production costs resulting from manufacturing or…

Q: Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His…

A: In the short run at least one input is fixed whereas in the long run there is no fixed cost.

Q: Need help with c (the break even point) and d (the price range for which the company will make a…

A: X                      Y = 159.24x+65065.22 280 159.24*280+65065.22 =…

Q: The theory of the firm mostly assumes that the goal of the firm is to maximize *   sales.…

A: The firm theory has an impact on a number of decisions, including manufacturing processes, resource…

Q: If the firm is minimizing cost it must also be maximizing profit. Agree or Disagree? Why?

A: Firms operating in a market incurs fixed costs and variable costs. Fixed costs do not change when…

Q: The firm raises prices. Quantity demanded in the short-run is unaffected, but in the long-run unit…

A: Firms value depends upon the several factors i.e. capital investment, revenue, liability and growth…

Q: Which of the costs discussed in the chapter is the most important when a firm is deciding how much…

A: The analysis of all costs is necessary for a firm. But analyzing marginal cost is most important.…

Q: A firm earns economic profit when total profit exceeds

A: To find : When firm book profit

Q: what are the maximum profits this firm can earn?

A: A competitive market is a typical market that answers the demands for goods and services. A…

Q: “The firm’s entire marginal cost curve is its short-run supply curve.” Is the preceding statement…

A: Marginal cost curve represents the change in total cost with the change in output produced.

Q: What is meant by normal profit?

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

Q: Which of the following are short-run and which are longrun adjustments? Wendy’s builds a new…

A: In economics, there are two periods that are studied to understand the investment decisions of the…

Q: When x gallons of olive oil are produced, the profit function is given by P(x) = 2x – 1000 (i) Find…

A: According to the question, profit function is given as P(x) = 2x – 1000 – x^2/5000 i) For the…

Q: “A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?

A: Economic Cost consists of explicit cost and implicit cost. In other words it consists of sum of…

Q: How many units should the firm produce to maximize profit?

A: Profit is maximized at the output level, for for which MR = MC.

Q: In the short run, if a firm is having economic losses, but the profit is greater than the average…

A: The following problem has been solved as follows:

Q: At what output rate does the firm maximize profit or minimize loss?

A: After marginal revenue exceeds marginal cost,at that output rate firms maximize profit.

Q: Total Revenue $5,000 per Week $2,600 per Week $2,400 per Week Total Variable Cost Total Fixed Cost…

A: Total revenue = 5000 $ Total cost = Total variable cost + Fixed cost = 2600 + 2400 = 5000 $ As the…

Q: P ATC MC = AVC DD A B\ C MR a. At output B, the firm is minimizing its losses in the short-run; in…

A: A monopoly firm is a firm that operates solely with no competition in the market. A monopoly is the…

Q: Fill in the blank: In the long run, maximizing profits is different from minimizing costs as the…

A: In a market, there are some differences in dealing the market condition in the short-run and in the…

Q: In the short run, the firm should continue to produce if and only if a.Price exceeds average total…

A: Total fixed cost is independent of output produced whereas  variable cost varies with the level of…

Q: 1)As a firm increases production, average total cost _____.   a will stay the same b will decrease c…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Zero profit does not mean that the entrepreneur does not get anything for his efforts.   a. maybe…

A: Economic profit is not identical to accounting profit. It is the difference between accounting…

Q: Increaseing marginal returns means that as the firm expands its output, its: OPTIONS long-run…

A: Increase in marginal returns: An increase in marginal returns refers to the variable input when an…

Q: What is the term for the lowest level of output at which a firm's goods are produced at minimum…

A: please find the answer below.

Q: Match the words from the list below to complete the following statement A firm will maximise by…

A: Marginal cost refers to the total costs which arise when the the quantity produced increases by one…

Q: A competitive firm is selling a oroduct on Rs 30 . Is it possible that he sells the product on Rs 35…

A: The perfectly competitive is the type of market where there large number of buyers and sellers. Each…

Q: Which statement is true? a. Socio-cultural factors do not determine the goods that society is likely…

A: socio-cultural factors are the factors that effect the consumers choices and tastes and they effect…

Q: How does a change in the response rate affect profit?

A: A response rate refers to a rate that shows the number of people or participants who have responded…

Q: If firms "satisfice" this means that a. objectives such as profit are not maximized. b. managers…

A: In a market, a firm's cost and pricing decision provide information about its behavior and market…

Q: The average profit is the difference between

A: To find : What is average profit.

Q: When a firm takes the short-down decision?

A: Shut down is a situation when it is better for the firm not to produce instead of producing.

Q: A firm maximizes its profit by producing the amount of output such that A) marginal revenue exceeds…

A: For a rational firm, the objective is to maximize its profits

Q: Choose the statement that is true. Fixed costs in the long run can become variable in the short run.…

A: Out of the given statements, only the fourth statement is true. The reason for this is explained…