Principles of Microeconomics (12th Edition)
12th Edition
ISBN: 9780134081199
Author: CASE
Publisher: PEARSON
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Question
Chapter 9, Problem 1.3P
To determine
The total revenue, total cost and fixed cost.
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Students have asked these similar questions
The Emerald Company, a firm in the perfectly competitive custom jewelry industry, asks you for your expert economic opinion. They tell you the following:
Total revenue is $110,000,
Total fixed costs are $80,000
Total variable costs are $100,000
Marginal cost is $220/unit
Quantity produced is 550 unit
What is your advice based upon the information above?
Keep operating and do not change the current production level.
Keep operating and increase production
Keep operating but decrease production
Shut-down immediately
From one industry to to another the actual period of time encompassing the long run is likely to vary. Do you agree? explain using examples
In the short-run, if the marginal cost of a firm in a competitive industry is increasing while its average variable cost is downward sloping, what can you say about slope of average total cost?
Chapter 9 Solutions
Principles of Microeconomics (12th Edition)
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Similar questions
- The following are the cost information of a typical ice tea company in an industry with 100 firms. Output (ice tea per hour) Marginal Cost ($ per ice tea) Average Variable Cost ($ per ice tea) Average Total Cost ($ per ice tea) 3 2.50 4.00 7.33 4 2.20 3.53 6.03 5 1.90 3.24 5.24 6 2.00 3.00 4.67 7 2.91 2.91 4.34 8 4.25 3.00 4.25 9 8.00 3.33 4.44 d) Is the price $8 a short-run or long-run equilibrium price for the industry? If the price is not a long run equilibrium price, what adjustments are likely to happen in the market for it to reach long run equilibrium. e) What price must prevail in the market for a typical firm to operate in the short run? At this price, how many ice tea will be supplied by all firms in the market?arrow_forwardThe accompanying graph depicts the cost curves of an individual firm in a perfectly (or purely) competitive industry.arrow_forwardIn the short run, if a marginal cost of a firm in a competitive industry is increasing while its average variable cost is upward sloping, what can you say about slope of average total cost?arrow_forward
- Based on the table above which shows Chip's costs, if Chip shuts down in the short run, his average variable costs will bearrow_forwardExplain why it is not economical for a firm to operate under increasing returns and negative returns.arrow_forwardIn the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while itsaverage variable cost is downward sloping, what can you say about slope of average total cost?arrow_forward
- Under a PCM, the long run equilibrium situation is that, Economic profit is equal to zero. Is this a breakeven point for all firms in the market? Please explain conceptually.arrow_forwardDylan's house-cleaning enterprise is a competitive firm. Dylan cleans houses for 39 € cach. His total cost ach day is 380€, of which 30€ is a fixed cost. He cleans 10 houses a day. What can you say about Dvlan's short-run decision regarding shut down and his long-run decision regarding exit.arrow_forwardIn the short run, the Sure-Screen T-Shirt Company is producing 500 units of output. Its average variable costs are $2.00 and its average fixed costs are $.50. The firm's total costs Multiple Choice are $2.50. are $1,250. are $750. are $1,100.arrow_forward
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