If a firm has negative accounting profits in the short run, it should a.Close since accounting profits are negative b.All other answers are incorrect c.Stay open if economic profits are positive d.Stay open regardless of economic profits Which one?

Q: assuming that the cd manufacturing business is a perfectly competitive industry, explain why his…

A: Perfect competition: It refers to that competition in which the firms are of small numbers and the…

Q: b) Use the MR, MC, and ATC curves along with supply and demand to show how profits will go to zero…

A: Solution: Perfect Competition: It refers to the market situation in which there are large number of…

Q: in short run even if it makes negative profit. Use well labeled

A: A competitive firm may incur losses in the short run(SR) as there are some fixed cost(FC) in the…

Q: If a competitive firm finds that it maximizes short-run profits by shutting down, which of the…

A: Shut down point: The shutdown point exits at that point where the price is equal to the minimum…

Q: “Even if a firm is losing money, it may be better to stay in business in the short run.” Is this…

A: Yes, in the short run, it may be better to run the firm even if it is losing money.

Q: Under a PCM, the long run equilibrium situation is that, Economic profit is equal to zero. Is this…

A: Under perfect competition market,Firms are price taker.Therefore whatever price is set by…

Q: A firm sells 1,000 units per week. Suppose the average variable cost is $40, and the average cost is…

A: In the short run, the firm has both fixed cost and variable cost. In the long run there is no fixed…

Q: In the short run, each firm experiences a loss of $

A: We know , Profit = TR - TC  TR = Price * Quantity TR = 100 *50 TR = 5000 ATC = TCQ TC = ATC * Q  TC…

Q: In the short run, when the output of a firm increases, its average fixed cost

A: To find : What will be average fixed cost.

Q: Alejandro's lawn-mowing service is a profit-maximizing, competitive firm. Alejandro mows lawns for…

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

Q: When marginal revenue equals marginal cost, the firm may be minimizing its losses, rather than…

A: The equilibrium condition for a perfectly competitive firm is given by - MR = MC For this level of…

Q: Why do a firm's profit disappear in the long run?

A: The firms operating in the long run, have to adjust and abide by the time frame which would allow…

Q: Explain in your own words why in the short run a firm may continue to produce even at a loss…

A: A firm in the short will continue to produce until price covers it variable cost. Otherwise the firm…

Q: (The Short-Run Firm Supply Curve) Use the following data to answer the questions below: Quantity…

A: (a) we can calculate marginal cost and average variable cost by using the following equations.…

Q: For the pizza seller whose marginal, average variable, and average total cost curves are shown…

A: In a perfectly competitive market there are large number of firms producing similar and identical…

Q: Complete table b. Calculate the total fixed cost for the firm  c. Is the firm operating in the…

A: The solution is given below

Q: A manager makes the statement that output should be expanded as long as average revenue exceeds…

A: Average revenue: Total revenue per unit of output = Price/OutputAverage cost: Total cost / output =…

Q: In the short run, when average variable cost of production is less than the price, a price takers…

A: The correct solution is option e.

Q: Your company sells Beyonce concert DVDS. Total fixed costs for your operation are $10,000 a year.…

A: Shut down When a corporation chooses to shut down, it means that production will be put on hold for…

Q: Which of the following will cause the purely competitive firm to stop operations?  A. the price can…

A: The total cost incurred by firms operating in a market includes fixed costs and variable costs.…

Q: Rose growing is perfectly competitive and all growers have the same costs. The market price is $27 a…

A: Price=27$ Q=2700 Average total cost(ATC)=21 $ VC = $19

Q: The attached figure shows the short-run cost curves for a perfectly competitive firm. If the price…

A: In the perfectly competitive market structure there exists a large number of buyers and sellers of…

Q: What is the difference between accounting profit and economic profit? Select one: a. Accounting…

A: Firms earn revenue with the help of the sale of the products that it produces. On the other hand, it…

Q: Given the operations of a peanut firm under perfect competition and assuming that the price of…

A: Under perfect competition, individual firms have no control over price. Therefore, the firm’s…

Q: Consider a firm that has no fixed costs and that is currently losing money. Are there any situations…

A: If a firm has no fixed cost, the total cost of a firm is equal to the total variable cost, and…

Q: ATC 30 AVC 20 MC 10 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans per day) In the short…

A: The firm produces output at the level where the marginal cost equals marginal revenue. The firm's…

Q: What does it mean to be operating a firm in the "long run?"

A: "Since you have asked multiple questions, we will only first question for you. If you have any other…

Q: Price Quantity Total Cost Fixed Cost Variable Cost $10 2000 $24,000 $8000 $16,000 (a) Should this…

A: Here, price, quantity, and different cost information of a firm is given to analyze the short-run…

Q: In the long run a the firm's fixed costs are greater than its fixed costs in the short run. b all of…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: The firm with total revenues of a 100 million explicit cost of 90 million and implicit cost of 20…

A: Accounting Profit is the difference between total revenue earned by firm and the explicit costs.…

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: Why are abnormal profits of a firm difficult to sustain?

A: The abnormal profits under perfectly competitive market are difficult to sustain because of the free…

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: In perfect competition, if the marginal cost increases which way does the curve shift? what are some…

A: Perfect competition is one of the market structures out of 4 types of market structures in an…

Q: "There are some technologies for which it is impossible to maximize profit in the long run. "…

A: Maximization of profits occur at the point where the marginal revenue and marginal cost are equal.

Q: Explain why a company would shut down in the short run.

A: The shut down point is the point at which a firm decides to seize its operations in the short run…

Q: What is the shutdown condition? a.A condition stating when a firm should cease to operate and…

A: The shut-down condition is applicable for short run, where a firm stops production if its revenue is…

Q: 'In the short run, the firm should shut down only if the price is less than average variable cost''…

A: This statement is absolutely correct.

Q: A firm sells 1,000 units per week. Suppose the average variable cost is $15, and the average cost is…

A: A break-even point is a point at which a firm's economic profit is zero.  Economic profit is revenue…

Q: Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His…

A: Both accounting profit and economic profit include fixed cost in the short run. Accounting profit =…

Q: If a firm’s current revenues are less than its current variable costs, when should it shut down? If…

A: The firms have several things to look after, including the total costs, fixed costs, variable costs,…

Q: Q3. The law of diminishing returns applies only to businesses with very simply production. Your…

A: The Law of diminishing marginal returns states that the increase of a single factor of production…

Q: In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?

A: When the firms earn economic profit in the short run, new firms will enter in the market cause…

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…