Bundle: Principles of Microeconomics, 7th + LMS Integrated Aplia, 1 term Printed Access Card
Bundle: Principles of Microeconomics, 7th + LMS Integrated Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305242463
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
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Chapter 14, Problem 5PA

Subpart (a):

To determine

The fixed cost, average variable cost, average total cost, and marginal cost, profit or loss of the firm if they shutdown, profit or loss of the firm if they continue to produce.

Subpart (b):

To determine

The fixed cost, average variable cost, average total cost, and marginal cost, profit or loss of the firm if they shutdown, profit or loss of the firm if they continue to produce.

Subpart (c):

To determine

The fixed cost, average variable cost, average total cost, and marginal cost, profit or loss of the firm if they shutdown, profit or loss of the firm if they continue to produce.

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If a firm’s current revenues are less than its current variable costs, when should it shut down? If the firm decides to shut down, should we expect that decision to be final? Explain using an example that is not in the book.
The Warren Watch Company sells watches for $27, fixed costs are $100,000, and variable costs are $14 per watch. What is the firm's gain or loss at sales of 7,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. $. What is the firm's gain or loss at sales of 20,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. $.
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