Microeconomics For Today (MindTap Course List)
9th Edition
ISBN: 9781305507111
Author: Irvin B. Tucker
Publisher: Cengage Learning
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Chapter 8, Problem 10SQ
To determine
What would happen at the price $6.
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Suppose a firm shuts down in the short run. Which of the following statements can you infer from the fact that the firm shuts down in the short run?
a.The firm's losses are equal to its fixed costs.
b.The firm would reopen in the long run.
c.The firm's economic profits are zero.
d.The firm's fixed costs are greater than its variable costs.
Juan makes dining room chairs in a perfectly competitive industry. He is looking for economic advice and tells you the following data about his business. (Assume cost curves have their standard shapes.)
Total revenue is $120,000,
Total fixed costs are $100,000
Total variable costs are $110,000
Marginal cost is $200/unit
Quantity produced is 600 units
What will you suggest to Juan?
A: Shut down immediately
B: Do not shut down and increase production
C: Do not shut down but decrease production
D: Do not shut down and do not change the current production level.
Tomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which sell for $30 a bushel. At this level of output, the marginal cost is $30 a bushel, average variable cost is $30.50 a bushel, and average total cost is $34.50 a bushel.
(a) What is the firm’s total fixed cost? You must show your work.
Chapter 8 Solutions
Microeconomics For Today (MindTap Course List)
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- Which of the following will cause the purely competitive firm to stop operations? A. the price can no longer cover the variable cost B. the price can cover the variable cost and half of the fixed cost C. the price can cover both the variable and the fixed costs but there is no economic profit D. the firm is realizing economic profit E. no correct answerarrow_forwardAccording to the figure above: a. Is the firm maximizing economic profit? b. What is the firm's short run shutdown price?arrow_forwardThe price of a case of ball bearings is $50. Seeing that he can't make a profit, the CEO, decides to shut down operations. What is the firm's profit/loss? Was this a wise decision? Explain.arrow_forward
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