Author Question: A firm is currently selling its output for 10 per unit and is producing where marginal revenue ... (Read 88 times)

newbem · **on:** Jun 29, 2018

A firm is currently selling its output for 10 per unit and is producing where marginal revenue equals marginal cost at an output level of 100 units.

If the firm's total variable costs are 900 and its fixed costs are 300 should it produce in the short run or shut down?

Question 2

Refer to Table 2-9. If the two countries specialize and trade, who should export wristwatches?

A) Thailand
B) They should both be importing wristwatches.
C) Japan
D) There is no basis for trade between the two countries.

choc0chan · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The firm should produce in the short run because its total revenue of 1000 (10 x 100) is greater than its total variable cost of 900 .

Answer to Question 2

A