A perfectly competitive firm maximizes profit by producing 100 units at an avetotal cost of $12 and an average fix cost of $5 for a market price of $10. Itsshutdown price will be -$10O b. $5$7O d. $12Show Transcribed TextUnder perfectly competitive conditions, a firm should continue to produce -OaUntil total revenue is as high as possibleOb Until price is equal to marginal costOc Until profits are negativeOd. While costs are falling, then stopOe. Until there is no more revenueShow Transcribed TextA perfectly competitive firm maximizes profit by producing 200 units at an averagetotal cost of $15 and an average fix cost of $5 for a market price of $25. Its totalfixed cost will be-O a $3000O b. $1000O c.$1500Od. $2000Show Transcribed TextAccording to this principle, as successive units of a variable factor (say labor) areadded to a fixed factor, beyond some point the marginal product attributed toevery additional unit of that variable factor will decline.O a. None of the aboveO b. Law of diminishing returnsOc. Principle of profit maximizationO d. Law of variable productivitye. Principle of economies of scale

Perfect competition is a type of market structure in which there are large number of buyers and…

A perfectly competitive firm maximizes profit by producing 100 units at an ave total cost of $12 and an average fix cost of $5 for a market price of $10. Its shutdown price will be - O a. $10 O b. $5 O c. $7 O d. $12

A perfectly competitive firm maximizes profit by producing 100 units at an ave total cost of $12 and an average fix cost of $5 for a market price of $10. Its shutdown price will be - O a. $10 O b. $5 O c. $7 O d. $12

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 6E

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Question

A perfectly competitive firm maximizes profit by producing 100 units at an ave
total cost of $12 and an average fix cost of $5 for a market price of $10. Its
shutdown price will be -
$10
O b. $5
$7
O d. $12
Show Transcribed Text
Under perfectly competitive conditions, a firm should continue to produce -
OaUntil total revenue is as high as possible
Ob Until price is equal to marginal cost
Oc Until profits are negative
Od. While costs are falling, then stop
Oe. Until there is no more revenue
Show Transcribed Text
A perfectly competitive firm maximizes profit by producing 200 units at an average
total cost of $15 and an average fix cost of $5 for a market price of $25. Its total
fixed cost will be-
O a $3000
O b. $1000
O c.
$1500
Od. $2000
Show Transcribed Text
According to this principle, as successive units of a variable factor (say labor) are
added to a fixed factor, beyond some point the marginal product attributed to
every additional unit of that variable factor will decline.
O a. None of the above
O b. Law of diminishing returns
Oc. Principle of profit maximization
O d. Law of variable productivity
e. Principle of economies of scale

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