Pearson eText Microeconomics -- Access Card
2nd Edition
ISBN: 9780136849513
Author: Acemoglu, Daron, Laibson, David, List, John
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 9Q
To determine
In short run, the profit-maximizing firm will operate at a price lower than the average production cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Is a firm that satisfies the immediate needs and wants of target markets always doing what’s best for its consumers in the long run?
How much should a firm sell of a particular product in order to maximize profit? What factor does it have to consider in arriving at this decision?
When would a profit-maximizing firm shut down in the short run?
Chapter 6 Solutions
Pearson eText Microeconomics -- Access Card
Knowledge Booster
Similar questions
- Determine a firm’s profit-maximizing decision in the short run.arrow_forwardWhat does zero economic profits in the long-run mean to the owner of a business operating in a perfect competitive market?arrow_forwardA profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?arrow_forward
- Assume a profit maximizing firm's short-run cost is TC = 700 + 60Q. If its demand curve is P = 300 - 15Q, what should it do in the short run?arrow_forwardWhat are the options available to a firm when the market demand exceeds capacity?arrow_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forward
- Why wouldn’t a firm just drop any product that isn’t selling inhigh enough volume to reach its break-even point?arrow_forwardWhy would a profit-maximizing, perfectly competitive form continues to operate for a period of time if price was greater than average variable cost but less than average total cost?arrow_forwardHas any particular firm in the perfectly competitive market found a way to differentiate or distinguish itself from its competitors? If so, what did the firm do? If not, what prevents the firm from differentiating itself?arrow_forward
- In the long-run equilibrium of a competitive market with identical firms, what are the relationships among price (P), marginal cost (MC), and average total cost (ATC)?arrow_forwardIn long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?arrow_forwardA profit-maximizing firm in the short run will expand output until marginal cost begins to rise until total revenue equals total cost until marginal cost equals average variable cost as long as marginal revenue is greater than marginal costarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
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