Author Question: The Razor-Thin Disposable Razor Company is a perfectly competitive firm producing where MR= MC. The ... (Read 46 times)

corkyiscool3328 · **on:** Apr 19, 2019

Question 1

Marginal revenue equals marginal cost at an output of 15 units. At this output, marginal revenue equals $30, average variable cost equals $20, and average total cost equals $25. In the short run, a profit-maximizing firm will earn a profit of

◦ -$75.
◦ $0.
◦ $75.
◦ $150.

Question 2

The Razor-Thin Disposable Razor Company is a perfectly competitive firm producing where
MR =
MC. The current market price of a disposable razor is $3.00. The firm sells 1,800 disposable razors. Its
AVC is $4.00 and its
AFC is $1.50. What should Razor-Thin do?

◦ Continue to produce because price exceeds
AFC.
◦ Shut down and produce zero razors because price is less than
AVC.
◦ Decrease production so that
AVC will decrease.
◦ Increase production so that
AFC will decrease.

ambernicolefink · **Reply #1 on:** Apr 19, 2019

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