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

Author Question: Suppose the price level of a product is gradually declining due to fall in demand. When will a ... (Read 81 times)

acc299

  • Hero Member
  • *****
  • Posts: 569
on: Jun 30, 2018
Suppose the price level of a product is gradually declining due to fall in demand. When will a producer of this product decide to shut down in the short run?

Question 2

In the short run, a firm continues to produce only if it can cover the:
 a. fixed costs.
  b. sunk costs.
  c. explicit costs.
  d. variable costs.
  e. implicit costs.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Moriaki

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 30, 2018
Answer to Question 1

A producer operating in this market will decide to stop production and shut down when the market price falls below his average variable cost of production. At this stage, staying in production means losing the fixed costs and not recovering all variable costs, and halting production means losing only the fixed costs.

Answer to Question 2

d


acc299

  • Member
  • Posts: 569
Reply 2 on: Jun 30, 2018
Gracias!

at

  • Member
  • Posts: 359
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Aspirin is the most widely used drug in the world. It has even been recognized as such by the Guinness Book of World Records.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Common sites of amputation. (A) Upper extremities. (B) Lower extremities. The surgeon determines th Common sites of amputation. (A) Upper extremities. (B) Lower extremities. The surgeon determines th
Sea Level during the Last Glaciation Sea Level during the Last Glaciation
Mechanisms of pain at the nociceptor level. Mechanisms of pain at the nociceptor level.
Changes in the Level of Education, 1975-2010 Changes in the Level of Education, 1975-2010
Average real hourly wages (2010 dollars) by education level, full-time workers aged 17 to 34 in 2011 Average real hourly wages (2010 dollars) by education level, full-time workers aged 17 to 34 in 2011
A car wash reduced the price of a basic wash as a promotion and test of the market. With the ... A car wash reduced the price of a basic wash as a promotion and test of the market. With the ...
Video: Medullary osmotic gradient - influencing factors

For a complete list of videos, visit our video library