Each firm in the following table operates in a market of perfect competition and wants to maximize its profit or minimizes its loss. Case P Q TR TC TFC TVC AC 1. 2. 1000 5000 3. $4.00 2000 increase output. 8000 $1,500 shut down. 1000 What do you recommend to the firm in case #1? decrease output, but not shut down. maintain its current rate of output 7000 4.50 AVC MC ANSWER 3.50 3.00 4.50 $5.50 5.00 4.00

Each firm in the following table operates in a market of perfect competition and wants to maximize its profit or minimizes its loss. Case P Q TR TC TFC TVC AC 1. 2. 1000 5000 3. $4.00 2000 increase output. 8000 $1,500 shut down. 1000 What do you recommend to the firm in case #1? decrease output, but not shut down. maintain its current rate of output 7000 4.50 AVC MC ANSWER 3.50 3.00 4.50 $5.50 5.00 4.00

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 33CTQ: Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the...

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