What is the shutdown decision of the firm? How should a firm decide whether to continue business or shut down in the short run?

Q: App10: Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27…

A: Given  Price (P) = $27 Total Cost (TC) = $280 Total Fixed Cost (TFC) = $30 Quantity (Q) = 10   We…

Q: must a perfectly competitive industry be in the long run equilibrium if a perfectly competitive firm…

A: The perfectly competitive firm are price takers who accept the industry price. No single firm has…

Q: Can excess profit be earned in this industry in the long run?

A: Excess profit means an amount of profit which is higher than the total cost incurred in production.

Q: If firms in a competitive industry incur an economic profit, what happens to supply, price, output,…

A: Economic profit is defined as difference between revenue that is received from the sale of a good or…

Q: At what point does a firm in a perfectly competitive industry shut down? Explain with graph.

A: In a perfectly competitive industry, at the profit maximizing level of output, when the market price…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: Should Tim want to maximize his profit in the short-run, how many t-shirts will he produce?

A: Given that the market structure is monopolistic competition, the profit maximizing condition is  MC=…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

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: When might a competitive firm shutdown in the short run and exit the market in the long run?

A: When a perfectly competitive firm finds itself in shutdown, that is, its market price is equal to…

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

A: The costs of production include both the fixed costs as well as the variable costs. The fixed costs…

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: Vhen a purely competitive industry is in long-run equilibrium, which statement is true?

A: A purely competitive market is a market in which all the firms sell an identical product and no firm…

Q: Explain with the help of diagram why a perfectly firm may experience loss or positive economic…

A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…

Q: Revenue, Cost MC AC AVC E AR = MR R Output Which point in the diagram is the shut-down point for the…

A: The total cost incurred by a firm can be divided/split into two- fixed costs(TFC) and variable…

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: Under what conditions should a competitive firm shut down in the short run?

A: In the short term, a corporation that operates at a loss (where the income is less than the overall…

Q: a. What is the profit maximizing level of output for the firm? b. What is the economic profit earned…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Consider the graph below. Should this firm stay oper shut down in the short run and why? MC ATC* AVC…

A: Over the short run, firm must get variable cost recovered to stay open in the market. A firm will…

Q: (b) Complete the following table. Using the following cost data how would you estimate the short run…

A: The perfect competition is a market form which shows a large number of buyers and sellers of a…

Q: Faced with rising costs , when should a firm choose to shut down , for example in (a)in the short…

A: a) In the short run, there are three possibilities. If price/average revenue > average variable…

Q: Under what conditions will a firm shut down temporarily? Explain theoretically and graphically.

A: Firm would shut down temporarily,if it is not able to cover the fixed cost. For this,price has to be…

Q: Under what conditions would a firm decide to shut down in the short run but remain invested in the…

A: In a market, a firm faces different situations in short-run and long-run due to which it makes…

Q: At what point would a competitive firm shut down in the short run

A: A competitive firm is a price taker, which means the firm takes the price determined by the market…

Q: When will a business shut-down in the short-run?

A: Short-run: - it is a short time period in which some factors of production are variable and some are…

Q: What does it mean to be operating a firm in the "long run?"

A: "Since you have asked multiple questions, we will only first question for you. If you have any other…

Q: opose Gwen's Country Curtains is currently producing 1000 curtains per month at a price of $80. In…

A: In monopolistically competitive market, the sellers sell differentiated products which are close…

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: Using curves, graphically, a firm will shutdown if what? What is an output at which the firm makes a…

A: Economic profit refers to the excess of total revenue over total cost.  To calculate the economic…

Q: Predict and explain the long run equilibrium of a firm operating in a perfectly competitive market?

A: The structure of the market where there are a large number of buyers and sellers selling homogenous…

Q: Discuss where does the shutdown being and why? What does the company has to do to get back to…

A: The answer is given below

Q: The graph shown below is that of Do Drop In, a shop in the dry-cleaning industry.       a) At the…

A: A monopoly is a sole producer of a good thus  having maximum market power and will act as a price…

Q: A firm is selling apples is profit-maximizing, but they're in a constant cost industry. The industry…

A: The normal goods are those goods whose demand tend to have a positive relationship with the income…

Q: 'In the short run, the firm should shut down only if the price is less than average variable cost''…

A: This statement is absolutely correct.

Q: Explain how the perfectly competitive firm decides whether to operate or shutdown in the short run.

A: There are mainly two types of costs in the process of production.

Q: In the short run, a firm’s decision to shutdown should not take into considerationa. avoidable…

A: ANSWER   In the short run, a firm’s decision to shut down should not take into consideration is

Q: Label the curves in the following graph  A. At each market price p1, p2, p3 at what output level…

A: (a) To identify: The labeling of curves in the given diagram and the output levels corresponding to…

Q: Describe a firm’s decision to shut down and when to exit the market,and explain the difference…

A: Perfect competition is a market structure that has a large number of buyers and sellers who have…

Q: Using the graph below, determine if the firm should shut down or stay open in the short run and why.

A: From the graph it is easy to understand the firm is earning profit or in a position of facing loss.

Q: In the short-run, competitive firms want to shut down if     P = MC     P = AVC     P > AVC…

A: A perfectly completive market is where several sellers and buyers are involved in the exchange of an…