Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 5, Problem 5.7IP
(a)
To determine
The short-run decision of the firm.
(b)
To determine
The long-run decision of the firm.
(c)
To determine
The shutdown price of the firm in the short run.
(d)
To determine
The shutdown price of the firm in the long run.
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Students have asked these similar questions
Price
Quantity
Total Cost
Fixed Cost
Variable Cost
$10
2000
$24,000
$8000
$16,000
(a) Should this firm shut down in the short run? Explain why or why not in 1-4 sentences.
(b) Assume this firm's total costs do not change in the long run. Should this firm exit in the long run?
(c) Are your answers to (a) and (b) different?
When are you are you expecting companies to produce in the short run?A. costs equal equal revenueB. price equals marginal revenueC. Average costs equal marginal costsD.marginal revenue equals marginal cost
A firm sells 1,000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65.1. What should the firm do in the short run? Why?2. What should the firm do in the long run? Why?3. At what price would the firm consider shutting down in the short run?4. At what price would the firm consider shutting down in the long run?
Chapter 5 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
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