If the firm is producing at an output level where marginal revenue exceeds marginal cost, then the firm should in order to maximize profit. * O increase price O increase output produced O produce less output O maintain production at the current level
Q: When a firm is earning normal profit from the production of a good, it is true that O total revenues…
A: The firms, businesses, or producers are those who are involved in the production process of goods,…
Q: A firm will at the output where marginal cost increases O a. begin to experience diminishing returns…
A: Marginal cost refers to the Change in total cost with respect to change in quantity.
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A: Since you have asked multiple questions, we have answered the first question for you. If you require…
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A: In perfectly competitive market, there is free entry and exit of firms.
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A: A fixed cost is a expense not increasing with an increase or decrease in the quantity of products or…
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A: The cost that depicts the total cost of a product or service that is being divided by the number of…
Q: Why do economists classify normal profits as costs? O A normal profit is the amount required to…
A: Profit is the difference between total revenue and total cost. Profit=TR-TC Normal profit is also…
Q: QUESTION 4 Marginal cost is the: O A. rate of change in total fixed cost that results from producing…
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A: A firm produces if the loss is less than the fixed cost in the short run otherwise shutdown to…
Q: 4) Why will a firm never plan to supply an output at which it has increasing returns to scale?
A: An increasing return to scale refers to the scale that occurs when the output rises by a larger…
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A: In the perfectly competitive market, it can be seen that marginal revenue and average revenue are…
Q: A competitive firm operating in the short run is producing at the output level at which ATC at a…
A: In short run the profit maximization level of output is produced at point where MR or Price = MC.…
Q: Question 8 The equilibrium of the producer is the O Shutdown point O MRTS = MPL/MPk O…
A: Shutdown point:- A shutdown point is a stage in business process where a corporation sees zero…
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A: Average total cost is alluded to as the whole of all creation costs separated by the total amount of…
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A: Firms operating in a market incur fixed costs and variable costs. Fixed costs refer to the type of…
Q: In the perfectly competitive market for mobile phone production all firms have access to the same…
A: Aggregate demand falls as a result of these negative demand shocks.
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A: Marginal revenue is the revenue earned from producing one extra unit of output. Marginal cost is the…
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Q: QUESTION 19 Marginal cost is the: O B. change in total cost that results from producing one more…
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Q: QUESTION 15 Consider a firm operating in a competitive market. The firm is producing 50 units of…
A: Q15) "Economic profits are computed by deducting total cost from total revenue."
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Q: For a perfectly competitive industry, diminishing marginal returns O a. Diminishing marginal returns…
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Q: Refer to the information provided in Figure 9.4 below to answer the question(s) that follow. MC AVC…
A: The given graph shows a firm in perfectly competitive market which produces output at MR=MC
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A: A perfectly competitive market refers to the market where all the firms sell similar products, thus…
Q: Solve the attahment.
A: Pure competition or perfect competition refers to the market structure where the number of buyers…
Q: Problem Set 1. A firm's production function is º=50L – 0.012 , where L denotes the size of the…
A: Note: Since more than one individual questions are asked, we are going to answer the first question…
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Q: 58) Refer to the attached Figure 17. When price rises from P2 to P3, what does the firm find? A.…
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Q: MC ATC AVC MR2 MR, %3D 30 40 50 60 Quantity Refer to Figure 6.1. Given MR2, what is total revenue if…
A: The formula is: Total revenue=Q*P Q=60 units
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Q: If the average cost (AC) of producing a good is increasing as a firm produces more output (q), then…
A: Total cost is the sum of variable cost and fixed cost.
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- A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?Please help ASAP What is the firm's fixed cost? What is the profit-maximizing level of output? Given that half of the fixed cost is avoidable and the firm produces at the optimal level of output, what is the firm's avoidable cost? Should the firm shut down its production? yes or noA firm uses a single input to produce a commodity according to itsshort-run production function f(x) = 4√x, where x is the number of units ofinput. The commodity sells for $100 per unit. The input cost $50 per unit.(a) Write down a function that states the firm’s profit as a function ofthe amount of input.(b) What is the profit maximizing amount of input and output?(c) Suppose the firm is taxed $20 per unit of its output and the priceof its input is subsidized by $10, explain in detail how this will affect the newinput and output levels?
- A tuition agency hires tutors to teach students. The following table displays how total outputincreases as tutors increase.No. of Tutors 1 2 3 4 5Total No. ofStudents4 10 18 24 3Tutors cost $50 each regardless of how many students each tutor has. The agency paid $500 in non-refundablemarketing fees to set up the business as a fix cost. In the short run, considering the shut-down condition, whatis the lowest price per student Tom’s tuition agency can charge? Explain your answer.5:23 The amount that a firm pays for all of the inputs that go into producing goods and services is the: O average cost. O total revenue. O total price. O total cost.15) If the average cost (AC) of producing a good is increasing as a firm produces moreoutput (q), then which of the following must be TRUE?A) AFC is falling; AVC is rising; MC > AVCB) AFC is falling; AVC is falling; MC > AVCC) AFC is rising; AVC is rising; MC > AVCD) AFC is rising; AVC is rising; MC < AVCE) AFC is falling; AVC is falling; MC < AVC
- Please answer all parts. Following is the information available for Bubble Gums produced by Bano and Co. Output (Q) Labor (L) Capital (K) Price 0 0 5 10 100 1 5 10 300 2 5 10 600 3 5 10 800 4 5 10 950 5 5 10 1,080 6 5 10 1,120 7 5 10 1,120 8 5 10 1,050 9 5 10 1,000 10 5 10 Define the production function in long run and short run. Find MPL and APL and exhibit it graphically. Identify all three stages of production. Assume you are the Economist for Bano and Co. decide how many labors would you hire to attain the firm’s objective and why.Many businesses taco increasing marginal costs because___ O A. in order to increase output, you have to purchase more inputs.O B. a business may have to shift to more expensive sources of inputs in order to increase output.O C. most businesses are not near capacity.OD. when the price falls, output increases.a) Derive the goods market demand curve in terms of the output (Y) and the exogenousvariables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. b)Draw the Goods Market Equilibrium. Be sure to label all curves, label the equilibrium point, and label the slope of each curve. c)Solve for the equilibrium output (Y) in terms of the exogenous variables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. d)Supposeg1increases, but stillc1+b1+g1<1. Using a graph of the goods market, show how we would represent an increase in the value ofg1on equilibrium output y. Be sure to label all axes, curves, and equilibrium points. e)Suppose instead,c1+b1+g1= 0. Is the equilibrium in the goods market still possible? If so, what is the equilibrium output? You must explain your answer to receive full credit.
- A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of False. ExplainNew taskFor a producer under complete competition, the following production function applies. Q = F (K, L) = KL where Q is the size of production, K is the size of the capital investment and L is the amount of labor. Assume that the price of capital, r, is 5 and that the salary, w, is 10. a) Assume initially that the capital is locked at 4 units. How much labor will the producer use to produce 50 units of the final product? What will be the total cost of producing these 50 units? b) For the production function above applies The marginal product for work MPL = K The marginal product for capital MPK = L Enter the cost-minimizing combination of capital and labor in the production of 50 units. Also enter the size of the costs. c) Write down the equation for the isocost line for the manufacturer
