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Refer to the data in the accompanying table. If the firm's minimum average variable cost is $7, the firm's profit-maximizing level of output would be
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4
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In this video, we explored:
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whether a firm has normal profit or positive economic profit.
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Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10.00 per unit. Its total fixed costs are $100 and its average variable costs are $3.00 at 20 units of output. This corporation
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is realizing an economic profit of $40.00.
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In this video, we explored:
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whether a firm should shut down if the market price is too low.
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Farmer Jones is producing wheat and must accept the market price of $7.92 per bushel. At this time, her average total costs and her marginal costs both equal $9.44 per bushel. Her minimum average variable costs are $5.83 per bushel. In order to maximize profits or minimize losses in the short run, Farmer Jones should
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continue producing but reduce output.
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Based on the video, which of the following statements is true in the short run?
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The supply curve for a perfectly competitive firm is a portion of its marginal cost curve.
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The perfectly competitive firm's supply curve is the
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MC curve at and above G.
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In this video, we explored:
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how the entry of new firms affects firms in a market.
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In pure competition, if the market price of the product is higher than the minimum average total cost of the firms, then
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other firms will enter the industry and the industry supply will increase.
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Based on the video, which of the following statements is true regarding a constant-cost industry?
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In the long run, the supply curve for a perfectly competitive firm is a horizontal line at the minimum of average total cost.
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The graphs suggest that in the long run, assuming no changes in the given information, the market
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supply curve will shift to the right.
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