Question

Analyze how a firm is able to deal with these costs (variable and fixed) if the...

Analyze how a firm is able to deal with these costs (variable and fixed) if the business starts to slow down.



Explain how a firm is able to increase their profits.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) A firm will decrease the production of the good if the firm is slowing down, that will decrease the variable cost of the firm as its the cost of the resources employed to produce the good, fixed cost is considered as the sunk cost and the business do not take sunk cost in to variable while making a decision.

b) For a firm to increase the profit they will maximise the revenue and decrease the total cost, as the difference between the two is considered as profit, the higher the revenue and lower the cost the difference between the two will be higher.  

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Explain one fixed and variable cost, if you were a manager of a fast food restaurant....
Explain one fixed and variable cost, if you were a manager of a fast food restaurant. Analyze how a firm is able to deal with these costs if the business starts to slow down. Explain how a firm is able to increase their profits.
How does a firm deal with fixed and variable costs if a business slows down... ?
How does a firm deal with fixed and variable costs if a business slows down... ?
What are examples of fixed and variable costs in a fast food restaurant? How do you...
What are examples of fixed and variable costs in a fast food restaurant? How do you think a firm will be able to maximize their profits if the economy starts to go into a recession?
To be profitable, a firm has recover its costs. These costs include both fixed and variable...
To be profitable, a firm has recover its costs. These costs include both fixed and variable costs. One way that a firm evaluates at what stage it would recover its invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit. Consider the case of Defense Dynamics: Defense Dynamics Inc. is considering a project that will result in fixed costs of $12,000,000 and per-unit variable costs of $10.75....
1. Bill runs a school for trapeze artists. The school has fixed costs of $10 million,...
1. Bill runs a school for trapeze artists. The school has fixed costs of $10 million, variable costs of $4 million, and total revenue of $15 million. In the short run the school will _____ and in the long run the school will _____. a) operate; stay in business b) operate; go out of business c) shut down; stay in business d) shut down; go out of business 2. If you know the price at which a firm sells its...
1. A firm will shut down in the short run if A. variable costs exceed revenues....
1. A firm will shut down in the short run if A. variable costs exceed revenues. B. total costs exceed revenues. C. fixed costs exceed revenues. D. it is suffering a loss. 2. If TR > TC, a firm would ________ in the short run and ________ in the long run. A. operate; expand B. operate; contract C. shut down; expand D. shut down; contract 3. As long as existing firms ________ in industry, new firms will enter the industry,...
Firm 1 is the incumbent firm and has already incurred all fixed costs, which are sunk....
Firm 1 is the incumbent firm and has already incurred all fixed costs, which are sunk. Firm 2 is a potential entrant that must pay a sunk cost of 100 to enter the market. Assume that both marginal cost and average variable cost equal 0. Assume that the two firms produce differentiated products. Both firms have the following demand equation: qi = 30 – Pi + 0.5Pj if qj > 0. Pi is firm i’s price and Pj is firm...
• A firm sells a product for $20.00 • Variable costs are $15.00 • Fixed costs...
• A firm sells a product for $20.00 • Variable costs are $15.00 • Fixed costs are $250,000.00 A) What is the breakeven volume? B) What is the breakeven revenues? C) What volume is required to generate a profit of $ 300,000?
Division one has sales of $110,000, variable costs of $120,000 in applied fixed costs of $40,000....
Division one has sales of $110,000, variable costs of $120,000 in applied fixed costs of $40,000. Should I eliminate this division? Yes, you increase profits by $52,000 Yes because variable costs exceed sales revenues No you’ll lose $10,000 No you’ll lose $50,000
Your business plan for your proposed start-up firm envisions first-year revenues of $300,000, fixed costs of...
Your business plan for your proposed start-up firm envisions first-year revenues of $300,000, fixed costs of $100,000, and variable costs equal to one-third of revenue. a. What are expected profits based on these expectations? b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits? (Round your answer to 2 decimal places.) c. If sales are 10% below expectation, what will be the percentage decrease in profits? e. Based on the DOL, what...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT