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 163 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?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

Did you know?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

According to the Migraine Research Foundation, migraines are the third most prevalent illness in the world. Women are most affected (18%), followed by children of both sexes (10%), and men (6%).

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.

Level II HCPCs Codes Cont. Level II HCPCs Codes Cont.
Muscle structure seen at the EM level Muscle structure seen at the EM level
The developed countries must reduce the level of greenhouse gas emissions The developed countries must reduce the level of greenhouse gas emissions
The surface temperature of the star is 6000 K. At what wavelength is its light output a maximum The surface temperature of the star is 6000 K. At what wavelength is its light output a maximum
In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ... In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ...
Nonshivering heat production Nonshivering heat production
Video: Frequency of stimulation and force (Recruitment of motor units and force)

For a complete list of videos, visit our video library