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 87 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!

Laurenleakan

  • Member
  • Posts: 309
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

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

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

In 1844, Charles Goodyear obtained the first patent for a rubber condom.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

Myocardial Oxygen supply and demand Myocardial Oxygen supply and demand
Rivers Are a Product of Their Watersheds Rivers Are a Product of Their Watersheds
Martin Van Buren, sitting uncomfortably for this engraving, would eventually ascend to the presidenc Martin Van Buren, sitting uncomfortably for this engraving, would eventually ascend to the presidenc
The fuel level must be above 15% and below 85% before the EVAP monitor will run on most vehicles. The fuel level must be above 15% and below 85% before the EVAP monitor will run on most vehicles.
Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ... Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ...
GloFish, marketed as the world’s first GM pet, are a controversial product of genetic engineering GloFish, marketed as the world’s first GM pet, are a controversial product of genetic engineering
Video: Properties of water -structure of water and polarity (Ionized and polar compounds)

For a complete list of videos, visit our video library