The table shows total cost and total revenue information for a competitive firm. Quantity (units) Total cost ($) Total revenue ($) 0 500 0 1 600 135 2 710 270 3 830 405 4 960 540 5 1,100 675 6 1,250 810 7 1,410 945 8 1,580 1,080 9 1,760 1,215 10 1,950 1,350 Firms making a loss will compare the losses if it shuts down to the losses if it operates in the short run. What quantity will the firm produce if it shuts down in the short run? Output: unitsunits What will the profits be if this firm shuts down? $ What quantity will the firm produce to minimize losses in the short run? unitsunits
The table shows total cost and total revenue information for a competitive firm. Quantity (units) Total cost ($) Total revenue ($) 0 500 0 1 600 135 2 710 270 3 830 405 4 960 540 5 1,100 675 6 1,250 810 7 1,410 945 8 1,580 1,080 9 1,760 1,215 10 1,950 1,350 Firms making a loss will compare the losses if it shuts down to the losses if it operates in the short run. What quantity will the firm produce if it shuts down in the short run? Output: unitsunits What will the profits be if this firm shuts down? $ What quantity will the firm produce to minimize losses in the short run? unitsunits
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter22: Getting Divisions To Work In The Firm’s Best Interests
Section: Chapter Questions
Problem 3MC
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The table shows total cost and total revenue information for a competitive firm.
| Quantity (units) | Total cost ($) | Total revenue ($) |
|---|---|---|
| 0 | 500 | 0 |
| 1 | 600 | 135 |
| 2 | 710 | 270 |
| 3 | 830 | 405 |
| 4 | 960 | 540 |
| 5 | 1,100 | 675 |
| 6 | 1,250 | 810 |
| 7 | 1,410 | 945 |
| 8 | 1,580 | 1,080 |
| 9 | 1,760 | 1,215 |
| 10 | 1,950 | 1,350 |
Firms making a loss will compare the losses if it shuts down to the losses if it operates in the short run.
What quantity will the firm produce if it shuts down in the short run?
Output:
unitsunits
What will the profits be if this firm shuts down?
$
What quantity will the firm produce to minimize losses in the short run?
unitsunits
If this firm chooses to operate at a loss, what will its profits equal?
$
If the cost and revenue numbers in the table will continue permanently, what will this firm choose to do?
The firm will
continue to operate in the short run, and exit the market in the long run.
shut down immediately.
continue to operate indefinitely.
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