Consider each of the following scenarios for profit maximizing firms operating in perfectly competitive markets. For...

Consider each of the following scenarios for profit maximizing firms operating in perfectly competitive markets. For each firm, state whether the firm should produce nothing, or increase, decrease, or maintain its output level.
1. XYZ Corp. has output of 2000 units, market price = $64, average total cost = $62, average variable cost = $48, and marginal cost = $67.
2. XYZ Corp. has output of 2000 units, market price = $64, average total cost = $70, average variable cost = $66, and marginal cost = $64.
3. XYZ Corp. has output of 2000 units, market price = $64, average total cost = $64, average variable cost = $62, and marginal cost = $64.
4. XYZ Corp. has output of 2000 units, market price = $64, average total cost = $62, average variable cost = $48, and marginal cost = $67.
5. UVW Corp. has output of 6000 units, market price = $10, total costs = $72 000, total variable costs = $66 000, and marginal cost = $9.
6. UVW Corp. has output of 10 000 units, market price = $4, total costs = $50 000, total variable costs = $30 000, and marginal cost = $4.

Expert Solution

Rahul Sunny answered 9 months ago

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