What happens to the value of resources when losses are present? If a firm making losses goes out of business, is this bad? Why or why not?

Q: Explain how short-run economic profits become long-run economic costs. When profits fall to zero,…

A: A stopwatch or a calendar cannot correctly identify the boundary between the short and long runs. It…

Q: What is the Marginal Cost if TC =10+5q What is the marginal cost if  TC= 100+5q   Explain

A: TC=10+5qNow,MC=∂TC∂qMC=∂(10+5q)∂qMC=10

Q: Should the Marginal revenue exceed the marginal cost? Why?

A: The firm is said to be in equilibrium when it has no tendency to increase or decrease its output. If…

Q: The number of firms in an industry is not always a good indicator of the extent to which that…

A: The number of sellers in an industry determines the market share of the firm. A large number of…

Q: What are the short-run and long-run costs of the production of Adidas?

A: Short run Cost is the cost price of manufacturing processes that have short-term inferences, i.e.,…

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: Why do economists believe that economic profit is the more accurate measure of a business success?…

A: Accounting profit only considers the cost that has actually happened, but economic profit considers…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: What two lines determine whether a firm is making positive or negative or zero profits?

A: Introduction The perfect competitive firm only needs to decide on one thing: how much to make. To…

Q: Explain what is economic profit?

A: Hi! Thank you for the question but as per the guidelines, we answer only one question at one time.…

Q: How much profit or loss does the firm make at the selected output level?

A: The additional cost incurred in the manufacturing of one more unit of a good or service is known as…

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: What are three short-run outcomes in the perfect competition?

A: In the short-run, the perfect competitive firms, can have three outcomes.

Q: Some producers do not stop their production when they face loss in their production. Why?

A: Shut-down decision signifies a short-run decision taken where a firm decides whether to operate or…

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: What type of organization is appropriate in the competitive business environment?Please explain with…

A: Competitive business environment:-  A competitive environment can be explained as a framework…

Q: Explain why optimal profits should occur when marginal cost equals marginal revenue.

A: MC or marginal cost is the addition to the total cost (TC) when an extra unit of output is produced.…

Q: Small “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not…

A: “Mom and Pop firms” is a small independent business entity where the ownership and operations are…

Q: what are the maximum profits this firm can earn?

A: A competitive market is a typical market that answers the demands for goods and services. A…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: (dollars) 0 MC MR 40 45 50 Quantity is currently producing 40 units of output. What would you advise…

A: Firm maximizes its profit where the MR is equal to the MC. Condition : MR = MC.

Q: When we know that the firms are earning just normal profits.

A: To find : When do firm earn normal profit.

Q: what are the inefficiencies of an imperfect competition ? what are the benefits of having a…

A: Imperfect competition is that market structure which does not include  Perfect competition. It…

Q: What is the firms profit or loss?

A: Since the marginal revenue of the firm is above the average total cost and the marginal cost the…

Q: What happens when a competitive industry begins to suffer losses because the demand for its output…

A: Companies can only generate short-term profits or losses in a totally competitive market. Because an…

Q: What does that mean in terms of long-run profit?

A: Perfectly Competitive Market is the market in which buyers and sellers are large in numbers and they…

Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: Filling for bankruptcy does not mean that the firms have to shut down. In the US the bankruptcy laws…

Q: How would you calculate the marginal cost of your firm's output? (think of a single product, not an…

A: Marginal cost can be understood as the additional cost incurred by the firm to produce an additional…

Q: Explain manufacturing firms should use demand leading instead of demand trailing capacity strategy.

A: A lead limit technique (lead request procedure) is a proactive methodology that adds or takes away…

Q: What are transaction costs?  How do transaction costs affect the boundaries of a firm?

A: The cost incurred during the process of buying and selling goods and services is referred to as…

Q: A firms total profit equals?

A: The amount of money a company makes by selling its goods or services at a specific price is revenue.…

Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?

A: Answer - In the long run where the every input can vary and as in the long run where firms can make…

Q: How do the entry and exit of firms in a purely competitive industry affect resource flows and…

A: Answer - Need to find - How do the entry and exit of firms in a purely competitive industry affect…

Q: why competitive firms stay in business if they make zero profit?

A: First it should be clear that zero economic profit means that total Total Revenue is equal to the…

Q: Is it even better for perfectly competitive firms to produce output even though it is losing money?…

A: In economic theory, perfect competition occurs when all companies sell the same products, market…

Q: What are the advantages of scale in capitalist competition

A: GIVEN   the advantages of scale in capitalist competition   Defination of scale: means cost benefits…

Q: Mario owns a wood-fired pizza shop which imitates traditional Italian methods. She uses a unique…

A: A firm maximizes profit by producing at level of output where MR = MC. Total Profit = Total Revenue…

Q: Refer to the table. If the firm produces 5 units that it sells at a price of $30.00 each, what will…

A: Use the below formula to find the profit and loss: Profit / Loss = Total Revenue - Total CostTotal…

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: I was wondering what the answer to this problem in Krugman´s microeconomics book is: A benefit…

A: In the short as well as long run they should close the business.

Q: The correct answer to whether it should be produced is that the firm should produce in the short…

A: The decision of whether a good should be produced further depends on price and average variable…

Q: Explain why it is not sensible to close a business firm if it earns zero economic profits.

A: Zero economic profit implies that the firm would earn the same if it decides to invest in the next…