In the short run, when the firm produces zero units of output, which of the following...

In the short run, when the firm produces zero units of output, which of the following is always equals to zero?

a. total cost

b. total variable cost

c. economic profit

d. total fixed cost

e. economic loss

Expert Solution

Ans: total variable cost

Explanation:

In the short run, when the firm produces zero units of output then there will be no variable cost. Variable costs arise when the firm starts production of output. But there is fixed cost even at zero level of output.

Rahul Sunny answered 2 years ago

In the short run a firm can produce 11 units of output by employing 2 units...

In the short run a firm can produce 11 units of output by employing 2 units (hours) of labour and 15 units of output employing 3 units of labour. Suppose the hourly wage rate is $10. What is the marginal cost of producing the 14th unit of output? Clearly show all steps of your work.

Assume that in the short run a firm is producing 100 units of output, has average...

Assume that in the short run a firm is producing 100 units of output, has average total costs of $100, and average fixed costs of $20. The firm's total variable cost at this output level is A) $120. B) $80. C) $8,000. D) $12,000.

13. If a firm shuts down in the short run and produces no output, its total...

13. If a firm shuts down in the short run and produces no output, its total cost will be a. zero b. equal to total variable cost c. equal to explicit costs only d. equal to total fixed costs e. equal to implicit costs only 14. The shape of the long-run average cost curve reflects a. the maximization of total product b. increasing and diminishing marginal returns c. economies and diseconomies of scale d. all of the above e. falling...

Short-run economic fluctuations occur when a shock moves a short-run equilibrium not at potential output when...

Short-run economic fluctuations occur when a shock moves a short-run equilibrium not at potential output when potential output increases when potential output decreases prices have fully adjusted to a shock A key feature of Keynesian economics is the prices are _______________. Therefore, if the economy goes into recession, without an policy intervention recovery will be ____________. sticky, slow flexible, fast stickly, quick flexible, slow Economic fluctuations that cause lower production, higher unemployment and lower inflation are caused by which of...

A competitive firm sells its output for $20 per unit. When the firm produces 200 units...

A competitive firm sells its output for $20 per unit. When the firm produces 200 units of output, average variable cost is $16, marginal cost is $18, and average total cost is $23. (4 points) What is the firm’s total revenue, total cost, and profit at the 200units of production? What is the firm’s fixed cost for 200 units? Compare the firm’s profit or loss at 200 units of output to if the firm would shut down. Does it make...

Which of the following statements is correct? A) In the short run, if a firm chooses...

Which of the following statements is correct? A) In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs. B) A firm minimizes its total costs of production when average variable cost is minimized. C) If a firm decides to shut down, its short-run total costs will equal 0. D) As a firm increases output in the short run, the change in total costs is...

Consider a firm which experiences increasing returns for output from zero units to 10,000 units and experiences diminishing returns for all output in excess of 10,000.

Consider a firm which experiences increasing returns for output from zero units to 10,000 units and experiences diminishing returns for all output in excess of 10,000. Draw the short run ATC(Q), AVC(Q) and MC(Q) curves for this firm. Assume the firm is a price taking firm. Identify a price where the firm is making a positive econo-mic pro¬fit (P1), a price where the firm is making zero economic profit (P2), a price where the firm is earning a loss but...

The following table shows the short-run cost data of a perfectly competitive firm. Assume that output...

The following table shows the short-run cost data of a perfectly competitive firm. Assume that output can only be increased in batches of 100 units. Quantity Total Cost (dollars) Variable Cost (dollars) 0 $1000 $0 100 1360 360 200 1560 560 300 1960 960 400 2760 1760 500 4000 3000 600 5800 4800 a. Explain how a firm chooses quantity to maximise profit in a competitive market. b. What is the firm’s fixed cost? (1 mark) c. Suppose...

(10 pts) A firm has the following short run total costs, where Q is output and...

(10 pts) A firm has the following short run total costs, where Q is output and TC is total cost: Q TC 0 $ 100 1 110 2 130 3 160 4 200 5 250 6 310 7 380 8 460 9 550 10 650 11 760 What is total fixed cost equal to? $100 What is average total cost at Q = 4? $50 What is average variable cost at Q = 7? $40 What is marginal cost at...

In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input).

In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input). At its profit-maximizing level of output, the marginal product of labour is equal to the average product of labour.a. What is the relationship between this firm’s average variable cost and its marginal cost?b. If the firm has 5 units of capital and the rental price of each unit is €9/day, what will be the firm’s profit? Should it...

Question