PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Question
Chapter 9, Problem 4QR
To determine
Explain the difference between the decision to go out of business and the decision to shut down.
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Give typing answer with explanation and conclusion
Give an example of a business that ceased production. Was the company's decision to stop production a shutdown or a decision to exit the market? How do you know?
When would a profit-maximizing firm shut down in the short run?
Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?
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- What is the shutdown decision of the firm? How should a firm decide whether to continue business or shut down in the short run?arrow_forwardConsider the following market for Tim's Terrible T-shirts a firm company producing in the monopolistically competitive t-shirt market. MC $14 $12 ATC $10 $8 $6 $4 $2 MR 0. 10 30 40 50 60 70 80 Quantity Price 20arrow_forwardCan you give examples of companies with perfect competition?arrow_forward
- Hannah has a small business making clothing alterations. Which of the following products would dramatically affect her profit margins if the price were to decrease for that product? A. dresses B. thread C. sewing machinesarrow_forwardAre Shoppe and Lazada considered as a perfect competition? Why do you think that is?arrow_forwardSmall “Mom and Pop" firms sometimes exist even though they do not earn economic profits. How can you explain this? Think about what all is covered in economic profit?arrow_forward
- Why would a firm that is making loss in the short-run choose to operate rather than shut down?arrow_forwardIf you're a manager in a highly competitive business such where should you put your most effort to maximize profit? Pricing or cost cutting?arrow_forwardWhat are the characteristics of a PC firm? Using Hot Dogs, Graph the market and the individual supply, demand and costs for Hot dogs side by side. Make sure to include the S.R. and L.R Price, Quantity, Demand, MR, MC, ATC, and profit.arrow_forward
- Describe how your restaurant would maximize its short-run profits.arrow_forwardWhat kind of business is a travel agency? What problems are solved with the help of a travel agency and how? How does a travel agency fit in the competitive market?arrow_forwardCan you create a graph showing perfect competition for grocery stores in a rural area ? And explain the graph?arrow_forward
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