110 tn the short run, irP-47C a perfeetly competitive fim A) rohees output and e
ID: 1127334 • Letter: 1
Question
110 tn the short run, irP-47C a perfeetly competitive fim A) rohees output and earns ero economie profit. ) produces output and earns an economie profit. c) produces output and incurs an economie loss. D) does not produce output and incurs an economie loss. Ill, Zoes Bakery operates in a perfeetly competitive industry, Whe supcakes is ss, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's margi short-run profits are A) $5: $1s0 B) $5: $300 C) S1: $150 D) $1; $300 cost isand her 112. Many furniture stores run "going out of business" sales but never go out of business. For the shut-down decision to be the appropriate one, the price of furniture must be than the A) higher; maximum B) lower; minimum C) higher, minimum D) lower; maximum average variable cost. 113. The short-run shut-down price is: A) the price at which economic profit is zero. B) the minimum of the AVC curve C) the intersection of the MC and ATC curves. D) the minimum of the AFC curve 114. Which of the following is TRUE? A) If the price falls below the average total cost, the firm will earn economic profits. B) Price and marginal revenue are the same in perfect competition. C) Economic profit per unit is found by subtracting AVC from the price. D) Economic profit is always positive in the short run. almost always take the market price as given that is, are considered -but this is often not true of A) Consumers; quantity minimizers; producers B) Producers; quantity takers; consumers C) Consume D) Producers; price searchers; consumers rs and producers; price takers; firms that produce a differentiated productExplanation / Answer
110.) The correct answer is (A)
At P=ATC, a perfectly competitive firm produces output and earns zero economics profit
111.) The correct answer is (A)
At the given level of output, her Marginal Cost is $5 and profits are $150
112.) The correct answer is (B)
For the Shut Down decision, the price of the furniture must be lower than the minimum of the Average Variable Cost.
113.) The correct answer is (B)
The Short Run Shut Down Point is the minimum of AVC Curve
114.) The correct answer is (B)
Price and Marginal Revenue are same in Perfect Competition
115.) The correct answer is (C)
Consumers and Producers take the market price as given that is are considered to be Price Takers but this is not true of firms that produce a differentiated products.
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