Question

A. Demonstrate graphically and explain verbally where the level of output should be when a perfectly...

A. Demonstrate graphically and explain verbally where the level of output should be when a perfectly competitive firm is earning a positive economic profit. Be sure to label the profit-maximizing level of output and shade in the area that represents profit. B. Show and explain the situation in which a profit-maximizing, perfectly competitive firm is earning a negative profit and chooses to continue to produce in the short-run. C. Show and explain how B would change if the firm chose to shut down. What would have to happen to cause the firm to shut down.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
please answer all questions 11. Demonstrate graphically and explain verbally the impact of a decrease of...
please answer all questions 11. Demonstrate graphically and explain verbally the impact of a decrease of 50 in government spending on the AD curve in the diagram when the multiplier is 3. 12. Using an AS/AD diagram, demonstrate graphically and explain verbally the short-run impact on the price level and real output of an increase in the labor productivity schedule. 13. Assuming the economy is in long-run equilibrium, using an AS/AD diagram, demonstrate graphically and explain verbally the long-run impact...
Using an AS/AD diagram, demonstrate graphically and explain verbally the short run impact on the price...
Using an AS/AD diagram, demonstrate graphically and explain verbally the short run impact on the price level and real output of overall technological change.
Assuming the economy is in long-run equilibrium, using an AS/AD diagram, demonstrate graphically and explain verbally...
Assuming the economy is in long-run equilibrium, using an AS/AD diagram, demonstrate graphically and explain verbally the long-run impact on the price level and real output of an expectation by business executives of a recession in the near future.
10. The total costs of a firm operating in perfectly competitive markets are described by the...
10. The total costs of a firm operating in perfectly competitive markets are described by the function C(y) = y2+15y+40, where y denotes the quantity (units) of output Y produced by the firm. The market price per unit of output is 25 euros. Find the profit maximizing output level, the firms profits (or loss) and explain briefly (in max 1 or 2 sentences) whether it would be better for this firm to continue producing or to shut down its production...
Suppose a perfectly competitive firm in the short-run is currently producing an output level of 20,000...
Suppose a perfectly competitive firm in the short-run is currently producing an output level of 20,000 units, charging a price per unit of $2. The firm incurs variable costs of $60,000 in producing this level of output. It also has fixed costs of $75,000. a) Calculate the economic profit (or loss) from the firm producing and selling these 20,000 units of output. Show all your work. b) Calculate the economic profit (or loss) from the firm shutting down and producing...
If a perfectly competitive seller is maximizing profit and is making zero economic profit, which of...
If a perfectly competitive seller is maximizing profit and is making zero economic profit, which of the following will this seller do? increase production in order to make an economic profit remain open but decrease production in order to make an economic profit go to work in the next-best earning opportunity shut down, with a loss equal to total fixed cost continue at the current output, making zero economic profit
Assume the following is true for a perfectly competitive firm. At the output where MR =...
Assume the following is true for a perfectly competitive firm. At the output where MR = MC, ATC > P. Based on this information, which of the following is correct? 1. More information is needed to know if the firm is in the short run or long run and if it should shut down. 2. The firm is definitely in the short run and should shut down. 3. The firm is definitely in the long run and should shut down....
At the current level of output for a perfectly competitive firm, the following data exist: Price...
At the current level of output for a perfectly competitive firm, the following data exist: Price = $21 Marginal cost = $5 Average variable cost = $9 Average total cost = $12 What should this firm do? The firm should shut down The firm should lower the price The firm should decrease output The firm should increase output The firm should keep the same level of output
A competitive firm's cost of production q units of output is C = 18 + 4q...
A competitive firm's cost of production q units of output is C = 18 + 4q + q2 . Its corresponding marginal cost is MC= 4 + 2q. a. The firm faces a market price p= $48. Create a spreadsheet with q = 0, 1, 2, ... 30, where the columns are q, R, C, VC, AVC, MC, and profit. Determine the profit-maximizing output for the firm and the corresponding profit. Should the firm produce this level of output or...
Determine whether the following perfectly competitive firm should produce output in the short run or temporarily...
Determine whether the following perfectly competitive firm should produce output in the short run or temporarily shut down, given: P = $350 TC = 3,250 + 100Q + 2Q2 where, Q is units produced per month If the firm does not operate, it will lose its $3,250 of fixed costs. What profit or loss will the firm have if it operates where MR = SMC? Does this profit or loss check with your decision on whether to produce or temporarily...