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Author Question: Pie-Oh-My, a monopolistically competitive firm, is producing 80 gourmet pies per day and selling ... (Read 55 times)

jerry coleman

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Question 1

Pie-Oh-My, a monopolistically competitive firm, is baking 80 gourmet pies per day and selling each pie for $25. At that production level 
ATC is $40, 
AVC is $30, 
AFC is $10, and both 
MR and 
MC are $16. This firm should


◦ continue to produce 80 pies, as price is greater than 
AFC.
◦ increase output to the point where price equals marginal cost.
◦ decrease output to the point where marginal cost equals average cost.
◦ produce zero pies and pay fixed costs.

Question 2

Pie-Oh-My, a monopolistically competitive firm, is producing 80 gourmet pies per day and selling each pie for $32. At that production level 
ATC is $40, 
AVC is $30, 
AFC is $10, and both 
MR and 
MC are $16. In the short run, this firm should


◦ continue to produce 80 pies, as price is greater than 
AVC.
◦ increase output to the point where price equals marginal cost.
◦ decrease output to the point where price equals average total cost.
◦ shutdown and produce zero pies and pay fixed costs.


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Marked as best answer by jerry coleman on Apr 19, 2019

l.stuut

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Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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