Exhibit 0126 $/q 6.00 MC ATC 4.90 AVC 4.00 d = MR 2.80 2.60 12 14 1. If the price-taking firm in Exhibit 0126 is currently producing 6 units, then to maximize profits in the short run, it should a. keep producing 6 units b. increase production to 13 units c. increase production to 14 units d. increase production to 8 units e. shut down immediately 2. A price taker in a perfectly competitive industry is currently selling 6000 units per month at the market price of $8 per unit. Monthly total variable costs are $50,000 and total fixed costs are $20,000. Marginal cost is $8 per unit and rising. Economic profits are equal to zero b. are greater than zero c. are less than zero d. cannot be determined a.

Exhibit 0126 $/q 6.00 MC ATC 4.90 AVC 4.00 d = MR 2.80 2.60 12 14 1. If the price-taking firm in Exhibit 0126 is currently producing 6 units, then to maximize profits in the short run, it should a. keep producing 6 units b. increase production to 13 units c. increase production to 14 units d. increase production to 8 units e. shut down immediately 2. A price taker in a perfectly competitive industry is currently selling 6000 units per month at the market price of $8 per unit. Monthly total variable costs are $50,000 and total fixed costs are $20,000. Marginal cost is $8 per unit and rising. Economic profits are equal to zero b. are greater than zero c. are less than zero d. cannot be determined a.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter22: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 6CQ: Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent...

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