Question
In: Economics
. Economic environment is important to a firm’s ability to make profits. Every firm will maximize profits...
. Economic environment is important to a firm’s ability to make profits. Every firm will maximize profits by operating at the minimum point of its average total cost curve. Is this statement true or false? Explain using diagrams for different market models. Which market model necessitate this condition?
Solutions
Expert Solution
The statement is false.
The statement is true for perfectly competitive market in the long-run. In case of other market it may happen or may not happen.
ATC would be the minimum where MC cuts ATC.
Rahul Sunny answered 1 year agoRelated Solutions
Economic environment is important to a firm’s ability to make profits. Every firm will maximize profits...
Economic environment is important to a firm’s ability to make
profits. Every firm will maximize profits by operating at the
minimum point of its average total cost curve. Is this statement
true or false? Explain using diagrams for different market models.
Which market model necessitate this condition?
It is often assumed that the goal of the firm is to maximize profits for its...
It is often assumed that the goal of the firm is to maximize
profits for its owners, the shareholders. Is the firm’s goal of
profit maximization always in society’s best interests? Be sure to
defend your answer and cite your sources.
It is often assumed that the goal of the firm is to maximize profits for its...
It is often assumed that the goal of the firm is to maximize
profits for its owners, the shareholders. Is the firm’s goal of
profit maximization always in society’s best interests? Be sure to
defend your answer and cite your sources.
1. A firm has market power if it can a. maximize profits.
1. A firm has market power if it cana. maximize profits.b. minimize costs.c. influence the market price of the good it sells.d. hire as many workers as it needs at the prevailing wage
rate.2. Which of the following is not a characteristic of a
competitive market?a. Buyers and sellers are price takers.b. Each firm sells a virtually identical product.c. Entry is limited.d. Each firm chooses an output level that maximizes profits.3. Suppose that a firm operating in perfectly
competitive market...
A perfectly competitive firm seeking to maximize its profits would want to maximize the difference between?
Question 1.A perfectly
competitive firm seeking to maximize its profits would want to
maximize the difference between?Select one:a. either a or d.b. its marginal
revenue and its marginal cost.c. its total revenue
and its total cost.d. its average revenue
and its average cost.e. its price and its
marginal cost.Question text 2.A profit-maximizing
monopolist sets?Select one:a. output where demand
equals average total cost.b. output where
marginal cost equals average revenue.c. output where
marginal cost equals marginal revenue.d. the product price
where...
A. In the short-run if the price of the firm’s product is $75 this firm will produce ______ units and (make a normal profit only; make an economic profit of $______; make an economic loss of $______).
Quantity TC0781156221932744320541065207660A. In the short-run if the price of
the firm’s product is $75 this firm will produce ______ units and
(make a normal profit only; make an economic profit of $______;
make an economic loss of $______). Suppose
this firm is typical of other firms in this industry. In the
long-run (firms in other industries will enter this
industry; firms in this industry will begin to leave)
so market supply will (increase, decrease), and
the price of the product...
Economic theory assumes that a firm’s goal is to: Multiple Choice maximize its economic profit. earn...
Economic theory assumes that a firm’s goal is to: Multiple
Choice maximize its economic profit. earn an economic profit.
maximize its accounting profit. earn an accounting profit.
The goal of the firm is to maximize firm value (maximize the stock price). How can the managers of the firm make this happen?
The goal of the firm is to maximize firm value (maximize the stock price). How can the managers of the firm make this happen? How might agency costs get in the way? Explain
A firm has hired you as a consultant. Their only concern is to maximize profits. This...
A firm has hired you as a consultant. Their only concern is to
maximize profits. This firm is in a perfectly competitive
industry--they have no control over price. They give you the
following information: We're selling 25 units at a price of $15 and
at the end of the day we're currently earning a profit of $50. It
costs us about $20 to produce another unit. Based on your analysis,
what would you advise them to do?
A firm has hired you as a consultant. Their only concern is to maximize profits. This...
A firm has hired you as a consultant. Their only concern is to
maximize profits. This firm is not in a perfectly competitive
industry--they have some control over price. They give you the
following information:
We're selling 80 units at a price of $20 and at the end of the
day we're currently earning revenues of $1600. Our costs are $2000.
It costs us about $25 to produce another unit.
Based on your analysis, what would you advise them to...
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