This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: The average cost of production at the profit maximizing output level for Jones Inc, is 4 per unit. ... (Read 169 times)

yoroshambo

  • Hero Member
  • *****
  • Posts: 566
on: Jun 30, 2018
The average cost of production at the profit maximizing output level for Jones Inc, is 4 per unit. The average variable cost of production is 3.5 per unit at this output level. The introduction of cheaper substitutes reduces the demand drastically and the market price falls to 1.5 per unit. If the minimum average variable cost the firm must incur is 2.5, identify the correct statement from the following.
 a. There are output levels where revenue exceeds variable cost when the price is 1.5 per unit.
  b. The firm will continue to operate in the short run.
  c. The firm will breakeven at the price of 1.5 per unit.
  d. The firm will shut down.

Question 2

If an individual firm in a market is a price taker, then:
 a. it faces a horizontal demand curve.
  b. it is operating in a monopolistically competitive market.
  c. it sells its product at the market price that is solely determined by the buyers.
  d. it faces a positively sloped marginal revenue curve.
  e. it faces significant barriers to exit from the market.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ambernicolefink

  • Sr. Member
  • ****
  • Posts: 359
Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

a


yoroshambo

  • Hero Member
  • *****
  • Posts: 566
Reply #2 on: Jun 30, 2018
Thank you :)


ambernicolefink

  • Sr. Member
  • ****
  • Posts: 359
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

Multiple experimental evidences have confirmed that at the molecular level, cancer is caused by lesions in cellular DNA.

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

On average, the ratio of carbon to nitrogen is much higher in terrestrial plants than in other major On average, the ratio of carbon to nitrogen is much higher in terrestrial plants than in other major
Block Diagram of a Dual-stage Pressure System for Dual-Stage Pressure Production of Nitric Acid Seme Block Diagram of a Dual-stage Pressure System for Dual-Stage Pressure Production of Nitric Acid Seme
Schematic depiction of the action of tryptophan synthase in one functional unit Schematic depiction of the action of tryptophan synthase in one functional unit
How much the temperature will rise depends on many factors that affect the level of GHG emission How much the temperature will rise depends on many factors that affect the level of GHG emission
The level of future emissions is closely linked to the rate of population growth The level of future emissions is closely linked to the rate of population growth
Denney's model ON actual level of performance on exercised and unexercised abilities Denney's model ON actual level of performance on exercised and unexercised abilities
Video: Fetal Development of the Cardiovascular System

For a complete list of videos, visit our video library