Which of the following statements is correct? * In order to maximize profits in the short run, a purely competitive firm should produce at the level where marginal cost is equal to price. A purely competitive firm will produce in the short run, so long as total receipts are sufficient to cover its total fixed costs. A purely competitive firm will always close down in the short run, whenever price is less than average total cost. In the long-run, firms incur costs that are fixed and variable.
Which of the following statements is correct? * In order to maximize profits in the short run, a purely competitive firm should produce at the level where marginal cost is equal to price. A purely competitive firm will produce in the short run, so long as total receipts are sufficient to cover its total fixed costs. A purely competitive firm will always close down in the short run, whenever price is less than average total cost. In the long-run, firms incur costs that are fixed and variable.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter8: An Introduction To Perfect Competition
Section: Chapter Questions
Problem 12PAE
Related questions
Question
Which of the following statements is correct? *
In order to maximize profits in the short run, a purely competitive firm should produce at the level where marginal cost is equal to price.
A purely competitive firm will produce in the short run, so long as total receipts are sufficient to cover its total fixed costs.
A purely competitive firm will always close down in the short run, whenever price is less than
In the long-run, firms incur costs that are fixed and variable.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning