Which of the following is true for this profit-maximizing firm at price P in the graph below? Price p* 0 Q* Marginal Cost Average Total Cost Average Variable Cost Demand = Marginal Revenue Quantity It will continue to earn economic profits in the long run. It is currently earning short-run economic profits. It should shut down to minimize its economic losses. It is not earning any economic profits.

Which of the following is true for this profit-maximizing firm at price P in the graph below? Price p* 0 Q* Marginal Cost Average Total Cost Average Variable Cost Demand = Marginal Revenue Quantity It will continue to earn economic profits in the long run. It is currently earning short-run economic profits. It should shut down to minimize its economic losses. It is not earning any economic profits.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 1MC

See similar textbooks

Similar questions

Farmer Brown grows blueberries. The average total cost, average variable cost, and marginal cost of growing blueberries for an individual farmer are illustrated in the graph to the right. Farmer Brown will incur losses if the market price falls below $ per crate. (Enter a numeric response using an integer.) Furthermore, farmer Brown should shut down in the short run if the market price falls below $ per crate. C Price and cost (dollars per crate) 40- 36- 32- 28- 24- 20- 16- 12- 8- 4 0 MC AT AVI 90 10 20 30 40 50 60 70 80 Quantity of blueberries (crates per week) 1
A firm in a perfectly competitive industry knows the following about its costs and revenue. The firm would like to maximize profit and has hired a consultant for advice. Price Q of Output Total Revenue Total Cost Total Fixed Cost 10 500 TR? 9,400 TFC ? Total Variable Cost Average Total Cost Average Variable Cost MC 6,500 is at minimum level AVC? MC? Total Revenue Number Total Fixed Cost Number Average Variable Cost Number Marginal Cost Number What is the value of the profit or loss (-) at the current output ( include the - sign if it's a loss) Number Consultant's Advice: As a consultant, what advice would you give to this firm:(Choose ONE answer from the following) Number 1. Firm should do nothing; it is already profit maximizing/loss minimizing 2. Firm should reduce quantity of output 3. Firm should increase quantity of output 4. Firm should shutdown operations 5. The given number set is inconsistent
The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5
A company in a perfectly competitive market produces an output level Q = 100 where marginal revenue is equal to marginal cost and has the following revenue and cost levels: Marginal cost curve intersects the average variable cost curve at $150. Marginal cost curve intersects the average total cost curve at $200. Marginal cost curve intersects the marginal revenue curve at $170. At Q = 100, ATC = $210 and AVC = $155 1. Draw the graph for the firm (include ATV, AVC, MC, and MR curves)
A company in a perfectly competitive market produces an output level Q = 100 where marginal revenue is equal to marginal cost and has the following revenue and cost levels: Marginal cost curve intersects the average variable cost curve at $150. Marginal cost curve intersects the average total cost curve at $200. Marginal cost curve intersects the marginal revenue curve at $170. At Q = 100, ATC = $210 and AVC = $155 1. Draw the graph for the firm (include ATV, AVC, MC, and MR curves) 2. At this output of Q = 100, calculate: total revenue (TR), total cost (TC), variable cost (VC), and fixed cost (FC). Show your work (formulas and calculations) 3. Is this firm making a profit or a loss at Q = 100? What would you suggest this firm should do in the short run? Explain
After selling 1,000 three-ring binders Tony DiFulvio realizes that the marginal revenue from selling the last binder was less than the marginal cost. From this we can conclude that Tony's profit would be greater if he sold an additional three-ring binder. Tony should shut down his business temporarily. Tony's business earns a short-run economic profit. Tony's profit fell after selling his 1,000th three-ring binder.
Suppose an increase in the cost of land increases the firm's fixed costs, as a result, average total cost increases from ATC2 to ATC1. What is profit maximizing quantity and price after the increase in average total costs? After the increase in average total costs does the firm make economic profit, economic loss or breaks even? How do you know? explain your answer.
Graph represents the cost structure of an individual firm in a perfectly competitive market. Please find the break-even and the shut-down points (both corresponding quantities and prices) for this firm
ps ndar 2 You're running a small firm, and you have an estimate of both your cost function and your demand curve. Your cost function is TC-791-11q+5g 2. while your inverse demand curve is P-870-0.4q, where P is the price of one unit of your output and q is the quantity of units produced and sold If you wanted to maximize profit. what quantity would you produce? Please round your answer to the nearest whole number (ie, no decimal places) Type your answer...
A Milton company works in perfect competition market, its total cost curve in short run isgiven in this function:TC = 200 − 4Q + 0.5Q2a. What output level should the firm produce to maximize profit? knowing that averagerevenue is $10.b. What is the firm profit at this level of output?
Delvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary. From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer. Calculate Delvin’s accounting profit per day. How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand?
A profit-maximizing firm is producing where MR = MC and has an average total cost of $4, but it gets a price of $3 for each good it sells.a. What would you advise the firm to do? The firm should shut down in the short run and exit the market in the long run. The firm is producing where MR = MC, so it should produce in both the short run and long run. As long as average variable costs are less than $3, in the short run, the firm should produce. In the long run, it should exit the market. The firm should shut down in the short run. Once the firm recoups its fixed costs, it should produce in the long run. b. What would you advise the firm to do if you knew average variable costs were $3.50? The firm should exit the market in the long run, but it should produce in the short run since it is covering average fixed costs. The firm should shut down in the short run. Once the firm recoups its fixed costs, it should reopen in the long run. The firm…