Show that for a proit-maximizing firm producing at its optimal quantity, y, its average total cost is minimized when marginal cost is equal to average total cost. Some tips to get you started:

Q: In the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while…

A: The short-run is the time period where at least one variable is fixed and others are variable. In…

Q: of 2 million units. The price that consumers are willing to pay for this output is $50 per unit. If…

A: The marginal revenue curve is a horizontal line at the market price, implying perfectly elastic…

Q: Firm Z's marginal cost curve is: MC(q) = 2q + 3. On a neatly labeled graph, plot ATC(q), AVC(q),…

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Q: Answer questions below using the cost curves for the price-taking firm shown in the following graph:…

A: The total variable cost(TVC)is basically the amount of output multiplied by the variable expense per…

Q: The application of the marginal cost pricing principal in a decreasing cost industy would lead…

A: According to the given question The cost principle basically determines the practice of setting the…

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: Hi. I'm a little confused on how the short run supply curve of a price taking firm is determined. Do…

A: In the perfectly competitive market, the firm is price taker only. It can not influence the market…

Q: In perfect competition, firms set price equal to marginal cost. Why can’t firms do this when there…

A: In the perfectly competitive market, firms are the price takers as they produce identical product…

Q: Explain why it is not economical for a firm to operate under increasing returns and negative…

A: Solution: Increasing return: It is the first phase of production. In this phase every additional…

Q: In the figure below, the firm's initial average total cost curve is SRAC with an initial marginal…

A: A firm in competitive market produces output at Price equals marginal cost.

Q: a. Calculate P, TR, MR, TVC, TF, ATC,AFC, MC , showing the functions you used in your calculations.…

A: We will answer the first three parts only. Please resubmit the question with any other parts you…

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: 11 b. Assume that the market price in the short run is P = $11, Giyen the way YOU drew With the…

A: Long run average cost, or LRAC, is referred to the cost for an unit of output when all the factors…

Q: For cases, A through F in the following table, would you (1) operate or shut down in the short run…

A: The firms should consider their costs and the revenue when they have to analyze regarding the total…

Q: Katie's Quilts is a small retailer of quilts and other bed linen products. Katie currently purchases…

A: Cost is the expenditure that is incurred in producing goods and services. It has two components that…

Q: Total Total Average Variable Average Output Fixed Variable Total Total Marginal (Q) Cost Cost Cost…

A: Q TFC TVC TC AVC ATC MC 150 500 400 900 2.67     200 500 800 1300   6.5

Q: Consider the details of 3 firms. If the price of the product is Rs.48, find the output that has to…

A: Total cost = Total fixed cost + Total variable cost Total revenue = Price * Quantity

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: What happens when a company doesn't follow economic thoery and charges pries below the marginal…

A: At the point when an organization doesn't follow economic theory and charges costs below the…

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: Use the following table and use your previous calculations: find the quantity where ATC is at a…

A: Average total cost refers to the cost per unit of output. Marginal cost refers to an addition to the…

Q: a. What is Mr. Leung’s fixed cost? b. For each level of output, calculate the variable cost (VC).…

A: Fixed cost = cost when output is zero TVC = TC – FC ATC = TC / Qty AFC = FC / Qty AVC = AVC / Qty MC…

Q: In the short run, if a marginal cost of a firm in a competitive industry is increasing while its…

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Q: Question 1: Shown below are the graphs of the firm's marginal cost, average variable cost, and…

A: Marginal cost graph tells about the additional cost incurred with one additional unit of production.…

Q: Does a competitive firm’s price equal its marginalcost in the short run, in the long run, or…

A: In perfectly competitive market there are many sellers as well as buyers. Price is given that means…

Q: Tomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which…

A: Fixed is the cost that remains same at all levels of output. It does not change as production…

Q: Calculate economic and accounting profit, and explain the importanceof the difference.

A: Profits are the excess of the revenue receipts over the firm’s total spending incurred during a…

Q: Suppose a firm producing table lamps has the following​ costs: Quantity Average Total Cost ​1,000…

A: The evaluation of the discussion between Ben & Jerry can be done as understanding the fact that…

Q: Use the following data to answer the question. The letters A, B, and C designate three successively…

A: Plant 'C' ATC is below other ATC for output level 80 units and above so plant C should be used for…

Q: Show that for a profit-maximizing firm producing at its optimal quantity, y∗, its average total…

A: The cost incurred by a producer on the production of each specific unit of good or service produced…

Q: If you have the following table that shows the costs of certain firm Fixed cost Variable costs Total…

A: The formula for the following are: FC = Cost when Q=0 TC = FC +VC MC = TCn -TCn-1

Q: Using the figure above, what is profit/loss for the firm?

A: In the case of a profit-maximizing firm, the optimal point of production is where the price is equal…

Q: Suppose a factory's marginal cost has a minimum value of $2; its average variable cost has a minimum…

A: find below the answer.

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: Use Table: Variable Costs for Lots. During the winter, Alexa runs a snow-clearing service in a…

A: Price would be more than marginal cost which is 20. Therefore price=25 Quantity=40

Q: Which of the following will most likely cause the long-run average cost curve of a fim in a…

A: which of the following is most likely cause the long-run average cost of firm in a constant cost…

Q: Explain the differences between constantcost, increasing-cost, and decreasing-cost industries.

A: As the new firms enter the market, they increase the demand for production factors to produce goods…

Q: Does a competitive firm’s price equal the minimumof its average total cost in the short run, in the…

A: A perfect competition(PC) market is one with many consumers and sellers producing identical…

Q: Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive.…

A: Total cost is the cost incurred on the input during the production process. Total fixed cost refers…

Q: Use the figure to answer the following question(s). Figure 8-2 $10 ATC AVC 6. 4 10 20 30 40 Quantity…

A: Marginal cost: It is the additional cost of production when one more unit of quantity is produced.…

Q: 1. In perfect competition, price equals marginal cost. Why is this not possible when there are…

A: In a perfectly competitive market, it can be seen that the market output is one at which price…

Q: Lisette owns a bakery. If she expands the size of her bakery but her average total cost of producing…

A: Here, Lisette being the owner of the bakery shop experiences constant returns to scale.

Q: (T/F) When price in a perfectly competitive market increased from $5 to $10, John's production…

A: A market system where all producers and consumers have full and symmetric information and there are…

Q: In the diagram above, when the firm's Output (Q) is 20, Average Variable Cost (AVC) is: $17.50 $7.50…

A: Average variable cost refers to the per-unit total variable cost i.e. AVC = TC/Q

Q: Graph TR and TC for the firm Graph TR and TC for the firm Q TFC TVC TC АС MC P TR MR Profit 3 1 6. 3…

A: AVC refers to average variable cost. It is calculated by dividing the total variable cost by the…