If perfectly competitive firms are producing at a profit-maximizing level of output where the price is equal to the average total cost: Select one: a. average total cost must be minimized. O b. economic profits must be zero. c. accounting profits must be positive. d. All of these are true. Clear my choice

If perfectly competitive firms are producing at a profit-maximizing level of output where the price is equal to the average total cost: Select one: a. average total cost must be minimized. O b. economic profits must be zero. c. accounting profits must be positive. d. All of these are true. Clear my choice

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 7QP

See similar textbooks

Similar questions

When are you are you expecting companies to produce in the short run?A. costs equal equal revenueB. price equals marginal revenueC. Average costs equal marginal costsD.marginal revenue equals marginal cost
Economics A firm’s supply curve is key to economic reasoning. Derive the supply curve of an individual firm in the short and in the long run. To that end, start arguing which assumptions on marginal returns imply a first decreasing and then increasing average variable cost curve, and then make use of shut down conditions. Explain in detail and use appropriate diagrams.
what are the inefficiencies of an imperfect competition ? what are the benefits of having a increasing competition accross varies sectors?
The agricultural market for corn can be characterized as a purely competitive industry. How will an increase in the cost of fertilizer that is sold to corn farmers affect the short-run costs and output for a farm in the industry? How will this affect the profit of the individual farm?
What are the assumptions of perfect competition? What are the prospects for profitability in the short-run and long-run under perfect competition?
Would independent trucking fit the characteristics of a perfectly competitive industry?
Do entry and exit occur in the short run, the long run, both, or neither?
Explain how short-run economic profits become long-run economic costs. When profits fall to zero, are owners worse off? Why or why not?
Jackson Hardware, a firm in the perfectly competitive custom hardware industry, asks you for your expert economic opinion. They tell you the following: - MC is $200/unit- Quantity produced 550 units - Total Revenue: $110,000 - Total FC are $80,000 - Total VC are $100,000 What is your advice based upon the info above?a) keep operating and increases productionb) shut down right nowc) keep operating but decreases productiond) Keep operating and do not change production at all
Bob's lawn mowing service is a profit maximizing, competitive firm. Bob 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 Bob's economic and accounting profits in the short run ? A. Economic profits are minus $10 and accounting profits are $20 B.Economic profits are $20 and accounting profits are minus $10 C. None Which one?
the long run supply curve in different cost industries..... help please are my answers correct? also where do i place the long run supply curve ??
Explain why a firm carries on production in short run even if it makes negative profit. Use well labeled diagrams to support your explanation.