Describe a firm’s decision to shut down and when to exit the market,and explain the difference between these choices

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Q: When might a competitive firm shutdown in the short run and exit the market in the long run?

A: When a perfectly competitive firm finds itself in shutdown, that is, its market price is equal to…

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Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: A new korean restaurant opens in a city. People are initially cautious about eating new food items,…

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

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Q: Below what price level would the firm shut-down

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Q: Answer the following, providing a graphical illustration along with your answer where necessary: a)…

A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…

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

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Q: What is the shutdown decision of the firm? How should a firm decide whether to continue business or…

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Q: How does a competitive firm determine its profit-maximizing level of out put? Explain. . When does a…

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A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

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Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?