Alejandro's lawn-mowing service is a profit-maximizing, competitive firm. Alejandro mows lawns for €27 each. His total cost each day is €280, of which €30 is a fixed cost. He mows 10 lawns a day. What can you say about Alejandro's short-run decision regarding shutdown and his long-run decision regarding exit?
Q: Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is…
A: The total cost is the sum of the total fixed Cost and the total variable cost and at the same time…
Q: App10: Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27…
A: Given Price (P) = $27 Total Cost (TC) = $280 Total Fixed Cost (TFC) = $30 Quantity (Q) = 10 We…
Q: Mo owns a Coffee truck which operates in a perfectly competitive industry. He faces the following…
A: Total Revenue = Price x Quantity Marginal cost = Change in Cost / Change in Quantity Marginal…
Q: Bob’s lawn-mowing service is a profit-maximizing,competitive firm. Bob mows lawns for $27 each.…
A:
Q: Under the assumption of perfect competition in short run firms only earn abnormal profit.…
A: Perfect competition is the market structure with large number of buyers and sellers, selling…
Q: Gymnast Clothing manufactures expensive hockey jerseys for sale to college bookstores in runs of up…
A: a. Revenue function is 110x
Q: Charlies's lawn-mowing service is a profit-maximizing.competitive firm. Bob mous lawns for $27 each.…
A: In perfect competition market firms are price taker . They have to accept the price determined by…
Q: Given the following information, state whether the perfectly competitive firm should shut down or…
A: The firm's production decision in short-run is based only on the variable cost and not fixed cost.…
Q: Calculate Kenji's marginal revenue and marginal cost for the first seven teddy bears he produces and…
A: Marginal revenue is calculated as the ratio of change in total revenue to change in quantity.…
Q: Explain why perfectly competitive firms are classified as a price taker
A: Answer - Price Taker Firm - The price taker firm are those firm who has not the ability to influence…
Q: Tomas is the general manager for a local automated car wash. The market he operates is perfectly…
A: Perfectly competitive market: It is a market structure where there exists a large number of buyers…
Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?
A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…
Q: Consider the following information about a business Rodriguez opened last year: price = $5; quantity…
A: Profits are calculated by taking the difference between the total revenue that is earned and the…
Q: Ameera's flower shop is a profit-maximizing, competitive firm. Ameera sells flower baskets for $27…
A: Given: Selling price=$27 Total cost each day=$280 Out of this, fixed cost=$30 Number of flower…
Q: Consider the graph below. Should this firm stay oper shut down in the short run and why? MC ATC* AVC…
A: Over the short run, firm must get variable cost recovered to stay open in the market. A firm will…
Q: Hampton Inc. produces soap in a purely competitive industry. The table below is Hampton Inc.'s cost…
A: In the pure competitive market reach firm has very small share of whole market as a result a typical…
Q: Neatly draw the Average Cost Family curves below. Label everything. Assume a purely competitive firm…
A: In a competitive market there are large number of firms selling identical products.
Q: Define perfect competition. Does a firm under perfect competition always make supernormal profit?…
A: The Perfect Competition market is that type of market in which the number of buyers and sellers is…
Q: Explain the fact that the short-run supply curve for a price taking firm is that segment of its…
A: The short-run decisions on production for a perfectly competitive firm have direct implications on…
Q: How to calculate profit of loss in perfect competition in short run
A: In the perfect competition; The profit-maximizing condition; MR = MC
Q: A firm under perfect competition is
A: To find : What is firm under perfect competition.
Q: Neatly draw the Average Cost Family curves below. Label everything. Assume a purely competitive firm…
A: Given below are the average cost curves of a perfectly competitive firm. It is given that the firm…
Q: This article about the closing of Sports Authority stores provides some rationale for why the chain…
A: The equilibrium price and quantity of a good sold in the competitive market are determined by the…
Q: Bob's lawn mowing service is a profit maximizingcompetitive firm. Bob mows lawns for $27 each. His…
A: A competitive firm is one that is a price taker and can sell any quantity of goods at the given…
Q: Using the figure above, what is profit/loss for the firm?
A: In the case of a profit-maximizing firm, the optimal point of production is where the price is equal…
Q: Explain in detail how a perfectly competitive firm makes its profitmaximizing decision.
A: Perfectly competitive market:- The market structure in which there are no barriers on entry and exit…
Q: Consider the following information about a business Rodriguez opened last year: price = $5; quantity…
A: Accounting profit is the net income created by a company. Accounting benefit is a company's net…
Q: 3. For each scenario, determine whether the firm should shut down or not. Don't just write "yes" or…
A: a. R=$6000 VC=$7500 FC=12,000
Q: Franchising is widely used in the casual dining and fast-food industry, yet Starbucks is quite…
A: Out of all the different market structures, star bucks will be included in the Oligopoly market…
Q: Question 3 Mehmood’s lawn-mowing service is a profit-maximizing, competitive firm. Mehmood mows…
A: It is given that the daily cost is $2800 and the fixed cost is $300. So variable cost = Total cost-…
Q: McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for…
A: Here, it is given that McDonald's has a fast-food resturant chain , which implies that it has many…
Q: 2. Bob’s lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27 each.…
A: In short-run, fixed costs are of no relevance or importance in making decision related to shut-down…
Q: Mehmood’s lawn-mowing service is a profit-maximizing, competitive firm. Mehmood mows lawns for…
A: 1. In short run TR > VC Or - continue TR = P×Q 2.in long run TR < TC Or - exit P < AVC…
Q: What type of market competitive environment Amazon operates in?
A: amazon is an online dealer and offers a fast home delivery. Most of the people have a confusion in…
Q: Complete the table above. What is the profit-maximizing output for this firm? a) 3 units b) 4 units…
A: Costs Revenues Quantity Produced Total Cost $ Marginal Cost Quantity Produced Price $ Total…
Q: What is the shutdown decision of the firm? How should a firm decide whether to continue business or…
A: For a perfectly competitive company, where the total revenue of the company, i.e. the product of its…
Q: Camara's lawn-mowing service is a profit-maximizing competitive firm. Camara mows lawn for $27 each.…
A:
Q: Should a firm shut down and why if its revenue is R=$ 1, 000. Its variable cost…
A: The profits earned by a firm operating in a competitive market are the difference between the total…
Q: If any of your answers are negative, put a minus sign in front of the number. You are given the…
A: We know , TC = TFC + TVC MC = TCn - TCn-1 TFC = AFC * Q TVC = AVC*Q TC = ATC*Q
Q: Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His…
A: A competitive firm is one of many firms producing identical goods.
Q: Using the graph below, determine if the firm should shut down or stay open in the short run and why.
A: From the graph it is easy to understand the firm is earning profit or in a position of facing loss.
Q: Dylan's house-cleaning enterprise is a competitive firm. Dylan cleans houses for 39 € cach. His…
A: Answer: Given, Price of house cleaning=39€ eachTotal cost=380€Fixed cost=30€So,Total variable…
Q: Goldbar is an energy bar firm selling in a perfectly competitive market but are considering the…
A: Perfect competitive market: It refers to the market under which various firms are selling goods and…
Step by step
Solved in 2 steps with 3 images
- Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.How does the average variable cost curve help a firm know whether it should shut down immediately?Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
- Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?4. Which formula represents the profits for a firm? (check all that apply) (AC=average cost, MC=marginal cost, AVC=average variable cost, P=price, Q=output, TC=total cost) a. PQ-TC b. PQ-AC c. Q(P-AC) d. P(Q-AC) e. Q(P-MC) f. P(Q-AVC)Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…
- Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…1. Which of the following represents the firm's short-run condition for shutting down? a. shut down if TR < TC b. shut down if TR < FC c. shut down if P < ATC d. shut down if TR < VCQuestion Calculate MC, AVC, and total fixed costs for the data below: Output Total Cost 0 20 1 25 2 30 3 35 4 40 5 45 6 50 7 55 8 60 Sketch the MC and the AVCcurves. Given that each output is sold at $8.5, calculate Average Revenue, Marginal Revenue, and profit
- 3. What is the meaning of 'acceptable loss' for a perfectiý competitive firm ? Draw a graph and explain.2. Explain, with the aid of a graph, the short-run position of a perfectly competitive firm making economic loss.1. Suppose a perfectly competitive firm is operating in short run. The information of MR, Q,ATC and AVC are 15 taka, 60 unit, 45taka and 35 taka respectively. Calculate firm’sprofit/loss and total fixed cost. From these calculations and based on all the giveninformation, can you conclude about the firm’s decision in short run? Explain your reasoningwith the help of a suitable diagram. Show all the relevant information in yourdiagram.[Q=profit maximizing output and MR=marginal revenue]