Firm A: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule Firm B: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule. Firm C: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule. 4. For cases A through C below, would you operate or shut down in the short-run. 1 ABC Total revenue: 2,000 5,000 5,000 Total cost: 1,500 6,000 7,000 Total fixed cost 500 1,500 1,500 Total variable cost 1,000 4,500 5,500 Firm A:

Firm A: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule Firm B: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule. Firm C: a) calculate the firm's profit or loss. b) explain why would you decide to operate, or shut down in the short-run using the operate or shut down rule. 4. For cases A through C below, would you operate or shut down in the short-run. 1 ABC Total revenue: 2,000 5,000 5,000 Total cost: 1,500 6,000 7,000 Total fixed cost 500 1,500 1,500 Total variable cost 1,000 4,500 5,500 Firm A:

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.7IP

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A breakfast place, a perfectly competitive eatery, sells its special for $5. Cost of waiters, cooks, and power average out to $3.95 per meal; cost of lease, insurance and other expenses average out to $1.25 per meal. What should this owner do. A)close her doors immediately b)continue producing in the short and long run c)continue producing in the short run, but plan to go out of business in the long run if price does not increase in the future d)raise her prices above the perfectly competitive level e)lower her output
In the long run, firms in a competitive marketA.earn positive accounting profit, but zero economic profit.B.earn zero accounting profit and zero economic profit.C.shut down because their accounting profit goes to zero.D.earn negative accounting profit, but positive economic profit.
Draw and describe a diagram representing the cost curves – MC, AC, and AVC – for a profit-maximizing firm under perfect competition. Show U-shaped AC and AVC curves. Label the breakeven and shut down prices. Also, show a price between the breakeven and shut down prices and explain how the firm decides on its profit-maximizing/loss-minimizing output level at that price and show how the amount of profit or loss can be shown in the diagram. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Crabby Bob’s is a seafood restaurant in a beach resort in Delaware. Crabby Bob’s earns a profit each month from May through September, suffers losses in October, November, and April but remains open, and remains closed from December through March. Given that the restaurant market in this town is perfectly competitive, how would you explain Crabby Bob’s decisions?
Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's short run decision regarding shut-down and his long-run decision regarding exit? Question 3 options: Bob should stay in business in the short run as well as in the long run Bob should quit his business immediately Bob should stay in business in the short run but quit in the long run None of the other answers are correct
Juan makes dining room chairs in a perfectly competitive industry. He is looking for economic advice and tells you the following data about his business. (Assume cost curves have their standard shapes.) Total revenue is $120,000, Total fixed costs are $100,000 Total variable costs are $110,000 Marginal cost is $200/unit Quantity produced is 600 units What will you suggest to Juan? A: Shut down immediately B: Do not shut down and increase production C: Do not shut down but decrease production D: Do not shut down and do not change the current production level.
(c) Should a firm shut down and why if its revenue is R=$ 1, 000. Its variable cost VC=$ 500 and its sunk fixed cost is F= $ 600. Its variable cost VC=$ 1, 500 and its sunk fixed cost is F= $ 500.
Lisa lawn company (LLC) is a lawn mowing business in a perfectly competitive market for lawn moving services. The following tables set out Lisa's costs Quantity(lawn per hour) Total Cost(dollars per lawn) 0 $30 1 $40 2 $55 3 $75 4 $100 5 $130 6 $165 A. If the market price is $30 per lawn, How many lawns per hour does Lisa's LLC now? B. If the market price is 30 per lawn, What is Lisa"s profit in the short run? C. if the market price falls to $20 per lawn, how many lawns per hour does Lisa's LLC now? D. if the market price falls to $20 per lawn, what is Lisa's profit in the short run? E. At What market price will Lisa shut down?
Explain why a company would shut down in the short run.
Which of the FF. shows the connection between the short run and the long run equilibrium? A. positive economic profits in the short run attracts other firms to enter the industry B. negative economic profits in the short run forces the losing firms to exit from the industry C. the entry and exit will stop once the economic profits become zero, thus, attaining a long run equiilibrium D. all are correct E. none is correct
A competitive firm’s short-run supply curve is its cost curve above its cost curve . a. average-total-; marginal- b. average-variable-; marginal- c.marginal-; average-total- d. marginal-; average-variable- Note: don't use chat bot
The packaged milk market in Pakistan is perfectly competitive. Some firms in the market are making profit, others are having losses. Draw and explain graphs showing MC, ATC, MR, AR, price and quantity of output to illustrate these situations. In the short run some of these firms may decide to shut down temporarily. In the long run some of these firms may exit the market, and new firms may enter. Draw and explain graphs to show these situations and short run and long run supply curves. iii. If firms can enter and exit the packaged milk market in the long run but not in the short run, show how a decrease in demand due to lower incomes of Pakistani consumers during COVID Pandemic affects price and profitability.