If a firm is producing at the profit maximizing level of output, it must be making a profit.

If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost,...

If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost, should it produce more, less or the same? Why? What is the profit-maximizing quantity for any firm to produce?

Draw a diagram depicting the profit maximizing level of output for a firm where the market...

Draw a diagram depicting the profit maximizing level of output for a firm where the market price is below the average total cost of production, but above average variable cost of production. Your diagram of the firm must include the ATC, MC, and AVC curves. Indicate in the diagram the loss that the firm is incurring.

14) For a monopoly firm, the profit maximizing output is at that level where ________ and...

14) For a monopoly firm, the profit maximizing output is at that level where ________ and the price of the product is determined from ________. A) AR=MR;AR B) AR = MR; MR C) MC = MR; AR D) MC = MR; MR E) none of the above

A firm is currently producing 50 units of output. At this level output produced: - Its...

A firm is currently producing 50 units of output. At this level output produced: - Its average total cost is 140 (ATC = 140) - The market price per unit of outputs is 160 - MR=40 - MC=60 a) Is this firm making profit or loss? How much? b) Are they maximum profits? Why? c) If your answer to part b was NO, what does this firm have to do to maximize profits?

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing...

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

. [Multi-product Firm’s Profit Maximization] Find (i) the profit maximizing output levels x and y and...

. [Multi-product Firm’s Profit Maximization] Find (i) the profit maximizing output levels x and y and (ii) the maximum profit for a firm producing two goods x and y with the profit function π(x, y) = 122x−2x 2 −2xy−4y 2 +180y−200.

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...

Assume a firm is operating under perfect competition and after profit maximizing, it finds that its...

Assume a firm is operating under perfect competition and after profit maximizing, it finds that its Price is P=200 and its average total costs are 180. Is this firm making a profit or a loss and how do you know (explain). Further, will that level of profit or loss continue for this firm for a long time – why or why not? Explain.    •   Assume that after profit maximizing, a monopolist finds that its price is 100, its output...

A profit-maximizing competitive firm produces a single output, y, using Input 1 and Input 2. The...

A profit-maximizing competitive firm produces a single output, y, using Input 1 and Input 2. The price of output rises by $3 per unit, and the price of Input One increases by $2 (price of Input 2 remains the same). The firm increases its use of Input One by 6 units Since the firm is a profit maximizer; a. The amount used of Input 2 did not change b. The amount used of Input 2 must have increased by at...

Which of the following conditions will result in the firm making a positive economic profit? P...

Which of the following conditions will result in the firm making a positive economic profit? P = AVC at the profit-maximizing q* P = ATC at the profit-maximizing q* P  ATC at the profit-maximizing q* P  ATC at the profit-maximizing q* ATC  P  AVC at the profit-maximizing q* An example of a direct negative incentive is: providing generous benefits and pay for employees. providing a commission for sales. providing an orientation for new employees. awarding a promotion for hard work. threatening to fire those...