WebThe firm should shut down in the short run and exit the market in the long run. The firm is producing where MR = MC, so it should produce in both the short run and long run. As long as average variable costs are less than $3, in the short run, the firm should produce. In the long run, it should exit the market. WebQuestion. true/false. 1- if a perfectly competitive firm shuts down in the short run, its variable cost equals zero. 2- if a perfectly competitive firm shuts dowm in the short run, its total cost equals zero.

Strategy to Find the Optimal Short Run Quantity - Tutor Help …

Web[20 pts] Find the (i)short-run and (ii) long-run shutdown conditions (i.e. cutoff prices) for the following cost functions, and (iii) the number of firms that would serve the industry in the long-run, assuming perfect competition with free entry and exit: a. c(q)= q3 +2q+ 40. b. c(q) = 2q2 +q1/2 +10. Previous question Next question WebThe answer is that shutting down can reduce variable costs to zero, but in the short run, the firm has already paid for fixed costs. As a result, if the firm produces a quantity of zero, it would still make losses because it … sbi bank po application form

Solved [20 pts] Find the (i)short-run and (ii) long-run

WebIf price falls below average variable cost, the firm will shut down in the short run, reducing output to zero. The lowest point on the average variable cost curve is called the shutdown point. The firm’s supply curve in the short … WebExpert Answer. 86% (7 ratings) As we know, according to the economic theory, the fir …. View the full answer. Transcribed image text: Which of the following represents the firm's short run condition for shutting down? … WebAug 12, 2024 · The observation that a firm will produce in the short run if it receives a price for its output that is at least a large as the minimum average variable cost it can achieve is known as the shut-down condition . 07 of … should parents give kids melatonin