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 90 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
:D TYSM

amandanbreshears

  • Member
  • Posts: 320
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

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?

Vaccines prevent between 2.5 and 4 million deaths every year.

Did you know?

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

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.

Fall Fall
Select the Code with the Highest Level of Specificity Select the Code with the Highest Level of Specificity
The human eye, a product of 600 million years of evolution (Lamb, Collin, & Pugh, 2007). The human eye, a product of 600 million years of evolution (Lamb, Collin, & Pugh, 2007).
A Production Function with Diminishing Marginal Product of Capital A Production Function with Diminishing Marginal Product of Capital
Your company advertises all prices on the menu board as a final price, including HST of 13%. A ... Your company advertises all prices on the menu board as a final price, including HST of 13%. A ...
Hearing level comparison amongst workers Hearing level comparison amongst workers
Video: Types of Burns

For a complete list of videos, visit our video library