Perfect Competition
... • The firm will shut down if it cannot cover average variable costs. – A firm should continue to produce as long as price is greater than average variable cost. – Once price falls below that point it makes sense to shut down temporarily and save the variable costs. – The shutdown point is the point ...
... • The firm will shut down if it cannot cover average variable costs. – A firm should continue to produce as long as price is greater than average variable cost. – Once price falls below that point it makes sense to shut down temporarily and save the variable costs. – The shutdown point is the point ...
Chapter 9 Long Run Cost and Output (CFO)
... 1. Firm’s choose their output level (quantity supplied) so as to maximize their profits Profits = Total Revenues (price x quantity supplied) x Total Costs (which depend on quantity supplied 2. In Perfectly Competitive Markets: • Market price is not determined by firm’s output decision, but is whatev ...
... 1. Firm’s choose their output level (quantity supplied) so as to maximize their profits Profits = Total Revenues (price x quantity supplied) x Total Costs (which depend on quantity supplied 2. In Perfectly Competitive Markets: • Market price is not determined by firm’s output decision, but is whatev ...
Name:
... 11. What will happen to the deadweight loss triangle if the marginal cost curve is steeper? Explain, drawing in a steeper MC curve that passes through the point (30,50). To do this, you must print the graph. Attach the printed graph to this set of material. (Or you can copy the graph and paste it in ...
... 11. What will happen to the deadweight loss triangle if the marginal cost curve is steeper? Explain, drawing in a steeper MC curve that passes through the point (30,50). To do this, you must print the graph. Attach the printed graph to this set of material. (Or you can copy the graph and paste it in ...
Nature of Supply
... offer at various prices during a given time period. The Quantity Supplied—is the amount of a good or service that a producer is willing to sell at each particular price. ...
... offer at various prices during a given time period. The Quantity Supplied—is the amount of a good or service that a producer is willing to sell at each particular price. ...
Chapter 22 – The Cost of Production Extra Multiple Choice
... 5. Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm has an accounting profit of: A) $500,000 and an economic profit of $200,000. B) $400,000 and an economic p ...
... 5. Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm has an accounting profit of: A) $500,000 and an economic profit of $200,000. B) $400,000 and an economic p ...
Microeconomics Questions - Council for Economic Education
... the firm cannot hire and fire workers. goods and services produced must last for more than five years. all resources and all costs are variable. the firm cannot shut down its operations while remaining in business. ...
... the firm cannot hire and fire workers. goods and services produced must last for more than five years. all resources and all costs are variable. the firm cannot shut down its operations while remaining in business. ...
According to the principle of diminishing returns, an additional
... it cannot be used as a substitute for other inputs in the production process. it cannot be scaled down to produce a smaller quantity of output. it cannot be increased to produce a larger quantity of output. it is sufficiently inexpensive to purchase that firms will want to buy as much as they can. ...
... it cannot be used as a substitute for other inputs in the production process. it cannot be scaled down to produce a smaller quantity of output. it cannot be increased to produce a larger quantity of output. it is sufficiently inexpensive to purchase that firms will want to buy as much as they can. ...
Chapter 12: Monopoly and Antitrust Policy
... agencies empowered to act against those in violation of antitrust laws. It initiates action against those who violate antitrust laws and decides which cases to prosecute and against whom to bring criminal charges. • The Federal Trade Commission (FTC), created by Congress in 1914, was established to ...
... agencies empowered to act against those in violation of antitrust laws. It initiates action against those who violate antitrust laws and decides which cases to prosecute and against whom to bring criminal charges. • The Federal Trade Commission (FTC), created by Congress in 1914, was established to ...
Microeconomics I
... marginal cost. Ans. False. If a firm is a price taker, its marginal revenue will always equal price (ie. average revenue). 4. When the production of a good involves several inputs and inputs are used in fixed proportions, an increase in the cost of one input will usually cause total costs to rise le ...
... marginal cost. Ans. False. If a firm is a price taker, its marginal revenue will always equal price (ie. average revenue). 4. When the production of a good involves several inputs and inputs are used in fixed proportions, an increase in the cost of one input will usually cause total costs to rise le ...
Elasticity of Supply
... simply cannot make an abundance of the planes • Quantity cannot stretch mucheconomists refer to a product like ...
... simply cannot make an abundance of the planes • Quantity cannot stretch mucheconomists refer to a product like ...
AdvPric
... price discrimination to extract the full consumer surplus from the customer. How does this work? – Lump sum service charge, equal to or less than the full consumer surplus at optimal output levels; – Volume charge based on marginal cost. – You need full information as to the demand schedule of each ...
... price discrimination to extract the full consumer surplus from the customer. How does this work? – Lump sum service charge, equal to or less than the full consumer surplus at optimal output levels; – Volume charge based on marginal cost. – You need full information as to the demand schedule of each ...
Profit maximization by firms
... sales quantity for a price-taking firm • Shut-Down Rule: – If P>ACmin, the best positive sales quantity maximizes profit. – If P
... sales quantity for a price-taking firm • Shut-Down Rule: – If P>ACmin, the best positive sales quantity maximizes profit. – If P
Chapter 17, Monopolistic Competition
... • only if these two curves touch each other without crossing. • To sum up, two characteristics describe the long-run equilibrium in a monopolistically competitive market: – Price exceeds marginal cost (same as in a monopoly market). This conclusion arises because profit maximization requires margin ...
... • only if these two curves touch each other without crossing. • To sum up, two characteristics describe the long-run equilibrium in a monopolistically competitive market: – Price exceeds marginal cost (same as in a monopoly market). This conclusion arises because profit maximization requires margin ...
Microeconomic Exam #3 Study Guide (Chapter 14-18)
... ATC curve continually declines Less concerned about new entrants Knows that they can achieve the same low costs because each firm would have a smaller piece of the market As the size of the market increase, evolve to competitive market How Monopolies make production and pricing decisions o ...
... ATC curve continually declines Less concerned about new entrants Knows that they can achieve the same low costs because each firm would have a smaller piece of the market As the size of the market increase, evolve to competitive market How Monopolies make production and pricing decisions o ...