Question

TRUE, FALSE OR UNCERTAIN. There are currently a number of firms selling different brands and types...

TRUE, FALSE OR UNCERTAIN. There are currently a number of firms selling different brands and types of digital cameras. There is the opportunity for one firm to partake in research and development that will decrease the Average Total Cost of production (and only ATC, not MC). This firm will undertake the research and development so as to gain long run economic profits.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The statement is true.

Reason

R&D for a firm leads to new products which also brings in new technology, lowering of the ATC in future. Since MC is not changed, only the fixed cost will be affected which does not affect in the short run.Thus, R&D may increase the cost to the firm currently, but it is definitely for long run economic profit as due to lower cost, it can lower the price of the product by gaining more market share.

As shown in the graph, due to lower ATC in future if R&D is used, it can increase its profitability in future.

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
There are currently a number of firms selling different brands and types of digital cameras. There...
There are currently a number of firms selling different brands and types of digital cameras. There is the opportunity for one firm to partake in research and development that will decrease the Average Total Cost of production (and only ATC, not MC). This firm will undertake the research and development so as to gain long run economic profits.
true or false. 10marks. show all working using graphs if applicable. There are currently a number...
true or false. 10marks. show all working using graphs if applicable. There are currently a number of firms selling different brands and types of digital cameras. There is the opportunity for one firm to partake in research and development that will decrease the Average Total Cost of production (and only ATC, not MC). This firm will undertake the research and development so as to gain long run economic profits.
For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN...
For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN WHY. a. In the long-run the typical monopolistically competitive firm earns no economic profit and that indicates that the firm is economically (productively) efficient. b. Monopolists have complete pricing freedom as they seek to maximize profits. c. In the short-run, if price drops below the average total cost, the perfectly competitive firm must shut down immediately.
State whether the following statements are true, false or uncertain and briefly explain the reason for...
State whether the following statements are true, false or uncertain and briefly explain the reason for your choice. Your grade will largely depend on the quality of your explanations. a. Suppose that a firm’s short-run total cost function is STC= 0.1q2 + 4q +100. Will the producer surplus at P=$15 be $302.5? b. Suppose that a firm is price taker. If the price is equal to marginal cost, then the profit is being maximized. c. If a firm wished to...
Briefly explain why you think the following statements are true, false, or uncertain. Your grade will...
Briefly explain why you think the following statements are true, false, or uncertain. Your grade will depend largely on the quality of your explanations. In the very short run price is absolutely fixed. Firms in long‑run equilibrium in a perfectly competitive industry will produce at the low points of their average variable cost curves because firms maximize profits and free entry implies that maximum profits will be zero. If a 1 percent increase in price leads to a 0.7 percent...
Explain why each of the following statements is True, False, or Uncertain according to economic principles....
Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the explanation that is important. A5-7. An economy with only price taking firms will have a horizontal short-run aggregate supply curve. A5-8. A given increase in aggregate demand has a larger effect on national income the less steeply do unit costs rise with increases in production.
Monopolistic Competition & Oligopoly Please elaborate on answer. TRUE OR FALSE - A monopolistically competitive market...
Monopolistic Competition & Oligopoly Please elaborate on answer. TRUE OR FALSE - A monopolistically competitive market is efficient in its long-run equilibrium because all firms in the market earn a zero economic profit. TURE OR FALSE - Department stores are monopolistically competitive because stores differ in the amount of customer service they provide. Why does entry into markets decrease firm profits? Describe some of the ways in which firms differentiate their products.
2. If perfectly competitive firms earn economic profit in the short run, then we would expect...
2. If perfectly competitive firms earn economic profit in the short run, then we would expect that in the long run Multiple Choice supply will decrease. existing firms will leave the market demand will decrease. new firms will enter the market. 3. Which of the following is consistent with a perfectly or monopolistically competitive market? Multiple Choice marginal revenue lower than price for each firm exit of small firms when profits are high for large firms a small number of...
I can seem to figure out these homework problems: Which of the following is a feature...
I can seem to figure out these homework problems: Which of the following is a feature of a perfectly competitive market? Large number of influential buyers and sellers Perfect information Firms set the prices Differentiated products Which of the following is NOT a feature of a perfectly competitive market? Homogenous products Unrestricted entry and exit Perfect information Large number of relatively small buyers None of the other options. They are all features of a perfectly competitive market. Which of the...
True/False Indicate whether the statement is true or false. ____     1.   The basic disadvantage of a...
True/False Indicate whether the statement is true or false. ____     1.   The basic disadvantage of a proprietorship is unlimited liability. ____     2.   An investor will diversify his portfolio to reduce risk. ____     3.   Investors must rely on stockbrokers to give detailed, day-to-day reports on stocks and bonds. ____     4.   One effect of speculators is to iron out price fluctuations because this is the way they make their profits. ____     5.   A perfectly competitive firm's short-run supply is infinite at the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT