Question
In: Economics
A perfectly competitive firm currently producing 100 units of output has ATC= $6 and AFC =...
A perfectly competitive firm currently producing
100 units of output has ATC= $6 and AFC = $4. The market price is
$3 and is equal to MC. Is the firm currently operating in the short-run
or the long-run? Explain why. Discuss if the firm is
currently maximizing profits (or equivalently minimizing losses)?
Explain if shutting down the business in this current situation
would be beneficial for the firm. If firms break even in the long
run and earn zero economic profits, would they stay in the
business? Explain why.
Solutions
Rahul Sunny answered 9 months agoRelated Solutions
A perfectly competitive firm currently producing 100 units of output has ATC= $6 and AFC =...
A perfectly competitive firm currently producing 100 units of
output has ATC= $6 and AFC = $4. The market price is $3 and is
equal to MC. Is the firm currently operating in the short-run or
the long-run? Explain why. Discuss if the firm is
currently maximizing profits (or equivalently minimizing losses)?
Explain if shutting down the business in this current situation
would be beneficial for the firm. If firms break even in the long
run and earn zero economic...
A perfectly competitive firm currently producing 100 units of output has ATC= $6 and AFC =...
A perfectly competitive firm currently producing 100 units of
output has ATC= $6 and AFC = $4. The market price is $3 and is
equal to MC. Is the firm currently operating in the short-run or
the long-run? Explain why. Discuss if the firm is
currently maximizing profits (or equivalently minimizing losses)?
Explain if shutting down the business in this current situation
would be beneficial for the firm. If firms break even in the long
run and earn zero economic...
Suppose that a perfectly competitive firm is currently producing 100 units of output. If the short-run...
Suppose that a perfectly competitive
firm is currently producing 100 units of output. If the short-run
marginal cost of producing the 100th unit is greater
than the price at which that unit can be sold, how must this firm
alter its labor input in order to maximize profit
A profit maximizing firm in a competitive market is currently producing 100 units of output. It...
A profit maximizing firm in a competitive market is currently
producing 100 units of output. It has average revenue of $10,
average total costs of $8, and a fixed costs of $200.
What is its profit, marginal cost, and average variable
cost?
Is the efficient scale of the firm more than, less than, or
exactly 100 units?
Question #4 A perfectly competitive firm is currently producing 10 units of output. Its current total...
Question #4
A perfectly competitive firm is currently producing 10 units of
output. Its current total
cost is $85 and its cost curves have the usual shapes. If the firm
increased output to 12
units, total cost would rise to $87. The firm’s fixed cost is $15.
Is Q = 10 the short-run profit-maximizing level of output for this
firm? Why or why not? Show your work and explain clearly your
reasoning. If you just show an answer with no...
A monopolistically competitive firm is currently producing 20 units of output. At this level of output...
A monopolistically competitive firm is currently producing 20
units of output. At this level of output the firm is charging a
price equal to $20, has marginal revenue equal to $12, has marginal
cost equal to $12, and has average total cost equal to $24. From
this information we can infer that
firms are likely to leave this market in the long run.
the firm is currently maximizing its profit.
All of the above are correct.
the profits of the...
A profit-maximizing firm in a competitive market is currently producing 200 units of output. It has...
A profit-maximizing firm in a competitive market is currently
producing 200 units of output. It has a marginal cost of $15, the
average total cost of $10, and a fixed cost of $200 (a) What is its
profit? (b) What is its average revenue? (c) What is its average
variable cost?
Assume the cost data is for a perfectly competitive firm: Q AFC AVC ATC MC 1...
Assume the cost data is for a perfectly competitive
firm:
Q
AFC
AVC
ATC
MC
1
60
45
105
45
2
30
42.5
72.5
40
3
20
40
60
35
4
15
37.5
52.5
30
5
12
37
49
35
6
10
37.5
47.5
40
7
8.57
38.57
47.14
45
8
7.5
40.63
48.13
55
9
6.67
43.33
50
65
10
6
46.5
52.5
75
Complete the following table:
P = 56
P = 40
P = 32
Will this...
Assume the cost data is for a perfectly competitive firm: Q AFC AVC ATC MC 1...
Assume the cost data is for a perfectly competitive
firm:
Q
AFC
AVC
ATC
MC
1
60
45
105
45
2
30
42.5
72.5
40
3
20
40
60
35
4
15
37.5
52.5
30
5
12
37
49
35
6
10
37.5
47.5
40
7
8.57
38.57
47.14
45
8
7.5
40.63
48.13
55
9
6.67
43.33
50
65
10
6
46.5
52.5
75
Complete the following table:
P = 56
P = 40
P = 32
Will this...
Suppose a perfectly competitive firm in the short-run is currently producing an output level of 50,000...
Suppose a perfectly competitive firm in the short-run is
currently producing an output level of 50,000 units, charging a
price per unit of $4. The firm incurs variable costs of $280,000 in
producing this level of output. It also has fixed costs of
$60,000.
a) Calculate the economic profit (or loss) from the firm
producing and selling these 50,000 units of output. Show all your
work. (2 points)
b) Calculate the economic profit (or loss) from the firm
shutting down...
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