Question
In: Economics
A competitive for maximizes profit and an output level of 500 units market price is $24...
A competitive for maximizes profit and an output level of 500 units market price is $24 average total cost is $24 50 cents at what range of average variable cost values for an output level of 500 would the firm choose not to shut down
Solutions
Expert Solution
the rage of average varible cost is below $24
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A firm produces at MR=MC if the price is above average varible cost
the firm produces if the AVC is below the price at the output level.
the firm earns losses but produces even at losses to minimize losses if it can cover the variable costs.
Rahul Sunny answered 2 years agoRelated Solutions
For competitive firms, they set marginal cost equal to market price at profit-maximizing level of output....
For competitive firms, they set marginal cost equal to market
price at profit-maximizing level of output.
In the short run, marginal revenue curve faced by a competitive
firm is downward-sloping.
Competitive firms always produce a positive amount of output in
the short run (q > 0).
Competitive firms earn zero economic profit in the long run
equilibrium.
All these are True False Questions
A. Explain in detail why a firm maximizes its profit by producing the level of output...
A. Explain in detail why a firm maximizes its profit by
producing the level of output at which marginal revenue equals
marginal cost. B. Explain in detail how mutual interdependence
impacts oligopoly markets. C. Explain in detail how managers make
use of Lock-in market power to increase market share for the
firm.
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?
At the current level of output, a profit-maximizing firm in a competitive market earns average revenue...
At the current level of output, a profit-maximizing firm in a
competitive market earns average revenue of $25, has an average
total cost of $22 and an average variable cost of $17. If the
firm's marginal cost curve is equal to its average total cost curve
at an output level of 20,000 units, then the firm earns profit of
$60,000 at its current level of output.
True
False
The short-run supply for a firm in a perfectly competitive
market will...
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?
A monopolist: Maximizes profit at the output where price equals marginal cost. Charges a higher price...
A monopolist:
Maximizes profit at the output where price equals marginal
cost.
Charges a higher price than a competitive firm, ceteris
paribus.
Is a price taker since it has market power.
Cannot earn an economic profit in the long run.
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
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...
Given a perfectly competitive market structure at the profit-maximizing output level, a firm’s total fixed cost...
Given a perfectly competitive market structure at the
profit-maximizing output level, a firm’s total fixed cost is $32,
total variable cost is $174, marginal revenue is $6.60, and the
quantity demanded is 38 units. Calculate the firm's profit at the
profit-maximizing output level. Show your work. Show your work.
(Show your work to earn credits. No Work, No Credit.)
At what level of output is profit maximized for a perfectly competitive firm? Why will the...
At what level of output is profit maximized for a perfectly
competitive firm? Why will the firm not produce this level of
output? Explain
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