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 162 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?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

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

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates’s recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Does this child have legs of different lengths or scoliosis? Look at the level of the iliac crests a Does this child have legs of different lengths or scoliosis? Look at the level of the iliac crests a
Schematic Diagram of the fluidized bed for the experiment (CHE415 Unit Operations) Schematic Diagram of the fluidized bed for the experiment (CHE415 Unit Operations)
MAP sensors use three wires: 1.5 volt reference from the PCM 2. Sensor signal (output signal) 3. ... MAP sensors use three wires: 1.5 volt reference from the PCM 2. Sensor signal (output signal) 3. ...
Hubbard’s Predication of Peak in U.S Oil Production with Actual Data Hubbard’s Predication of Peak in U.S Oil Production with Actual Data
Many U.S. regions under threat due to changes in sea level Many U.S. regions under threat due to changes in sea level
Average Surface Air Pressure – July Average Surface Air Pressure – July
Video: Metabolic Rate, Heat and Thermoregulation - response to heat and cold stresses

For a complete list of videos, visit our video library