If the firm's lowest average cost is $52 and the corresponding average variable cost is $26, what

Question:

If the firm's lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if
a. The market price is $51?
b. The price is $36?
c. The price is $12?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics Principles and Policy

ISBN: 978-0538453653

12th edition

Authors: William J. Baumol, Alan S. Blinder

See More Books

Question Posted: Apr 12, 2016 07:14 AM

See More Questions

If it is possible for a perfectly competitive firm to do better financially by producing rather than shutting down, then it should produce the amount of output at which: a. MR < MC. b. MR = MC. c. MR...
Is it ever better for a perfectly competitive firm to produce output even though it is losing money? If so, when?
A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm??s total costs are C(Q) = 40 + 8Q + 2Q2.a. How much output should the firm...
b) Calculate the Fault Level in MVA if a symmetrical bolted 3-phase fault occurs on the LV side of the 5MVA Transformer at 11kV c) The Tranformer impedance is 6% - Calculate the short circuit current.
Sundance Systems has the following transactions during July. July 5 Purchases 40 LCD televisions on account from Red River Supplies for $2,500 each, terms 3/10, n/30. July 8 Returns to Red River two...
Regency Rug Repair Company, which currently offers cash sales only, is trying to decide whether to give customers 30 days to pay. The firm repairs 6,000 rugs per month at an average price of $32 each...
The useful life of a device is often published in what document?
Presented below is the balance sheet of Sameed Brothers Corporation (000s omitted). Instructions Evaluate the balance sheet presented. State briefly the proper treatment of any itemcriticized. SAMEED...
What are the potential benefits of integrating elements from both positive psychology and clinical psychology? Please include references
Twenty-five people are surveyed in the Mall of America and asked to taste and rank four different brands of coffee. The preference table below shows the rankings of the 25 voters. Suppose that the...
Explain why it is not sensible to close a business firm if it earns zero economic profits.
Explain why a perfectly competitive firm does not expand its sales without limit if its horizontal demand curve indicates that it can sell as much as it desires at the current market price.
According to the theory of the kinked demand curve, if a firm were to lower its price, its competitors would ______. a) lower theirs b) raise theirs c) keep theirs the same
Chris Cornell purchased a rental property on January 1, 2023, for $400,000. Not considering the value of the land, the building's cost is $320,000 (as CCA does not apply to land). The building falls...
You believe that a company will pay a $ 2 dividend per share next year and following this year the dividends will have a dividend growth rate of 6 % annually in perpetuity. You want a 1 2 % yield in...
1. Figure 1 reproduces John's notes on Pioneer Gypsum and Global Mining. Calculate the expected return, risk premium, and standard deviation of a portfolio invested partly in the market and partly in...
You estimate you will need a nest egg $2070000 for retirement. You should deposit $ 1356.47 each month for the next 40 years into an account with an APR of 5% compounded monthly to reach your goal....
Barriers to Integration has a major focus on "integration," which is defined as "the process of incorporating or bringing together different groups, functions, or organizations, either formally or...
On August 1, 2024, Chen Corporation, a public company, purchased $100,000 of Alaska Ltd. five-year, 7% bonds at par. The bonds were purchased for trading purposes and pay interest semi-annually on...
Distinguish between the work performed by public accountants and the work performed by accountants in commerce and industry and in not-for-profit organisations.
Explain why a currency depreciation leads to an improvement in a countrys trade balance.
Explain why American fiscal policy is less powerful and American monetary policy is more powerful than indicated in the closed-economy model described earlier in this book.
Given what you now know, do you think it was a good idea for the United States to adopt a policy mix of tight money and large government budget deficits in the early 1980s? Why or why not? What were...
The sheet Inventory lists a grocery store's inventory for two months. Calculate the percent change for each item to two decimal places. If the formula gives an error, put "Initial Stock" in the cell....
A local manufacturer produces two different products on the same production line. Product A requires .5 hours of labor while product B requires .8 hours of labor. The total labor available in any one...
Hampton Company reports the following information for its recent calendar year. Income Statement Data Sales Expenses: Cost of goods sold Salaries expense Depreciation expense Net income Required:...

If the firm's lowest average cost is $52 and the corresponding average variable cost is $26, what

Question:

Step by Step Answer:

a If the market price is 51 the firm should reduce output to produce at the point where MC ...View the full answer

Economics Principles and Policy

Students also viewed these Economics questions