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 80 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!

parshano

  • Member
  • Posts: 333
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

Despite claims by manufacturers, the supplement known as Ginkgo biloba was shown in a study of more than 3,000 participants to be ineffective in reducing development of dementia and Alzheimer’s disease in older people.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Although Neandertal brain sizes fall well within the modern human range, their EQ is lower than mode Although Neandertal brain sizes fall well within the modern human range, their EQ is lower than mode
Numerical pain level chart with word modifiers. Numerical pain level chart with word modifiers.
Overallocation of Labor to Farming When Farmworkers Are Paid Their Average Product Overallocation of Labor to Farming When Farmworkers Are Paid Their Average Product
Importance of Considering Gestalt Principles in Product Design Importance of Considering Gestalt Principles in Product Design
Find the factor demand for labour and the amount of output it will produce. Show all ... Find the factor demand for labour and the amount of output it will produce. Show all ...
Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ... Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ...
Video: The Pressure Flow Model in a Plant

For a complete list of videos, visit our video library