Is the firm earning any economic profit currently

Assignment Help Econometrics

Reference no: EM131039675

Assume that the following conditions exist for a perfectly competitive firm:
price = $10, current output = 100 units/hour, ATC at current output = $9.00, AVC at current output = $8.00 and MC at current output = $8.00.

a. Is the firm earning any economic profit currently? How much is its profit or loss?

b. Is the firm maximizing its economic profit? How do you know? What should the firm do to maximize profit? Should it increase or decrease output?

c. Given your answers in part b, how will the market adjust to reach long-run equilibrium? What will happen to the economic profit in the long-run? Include appropriate graphs for the market and the typical firm in your explanation.

Reference no: EM131039675

Questions Cloud

What sort of moral society existed at ie : a. What sort of moral society existed at IE? Why? b. What does IE need to change? c. Do you believe IE's methodologies as for the psychiatric healing centers were moral?

An automatic teller machine : An automatic teller machine requires that each customer enter a 4-digit personal identification number (PIN) when he or she inserts a bank card.

Communications program which announces a reduction in staff : You have been asked to present an information session on wills and estate planning to a group of Aboriginal people. Devise a communications program which announces a reduction in staff when the company has just announced record profitability

Implementing an erm program : Is there anything you would advise risk managers not to do when implementing an ERM program?

Is the firm earning any economic profit currently : Is the firm maximizing its economic profit? How do you know? What should the firm do to maximize profit? Should it increase or decrease output?

Increasing emphasis on sales promotion and publicity : Suggest reason for the increasing emphasis on sales promotion and publicity in the promotion mix of many marketing organizations

Question regarding the best manage risks : Once the obstacles to organizational strategy are identified, how do you best manage these risks?

Request for a company or individual to bid for : A tender is a request for a company or individual to bid for. You can assume you already have replied to the tender and you have won the tender. So, you are going to be the one delivering the service or developing the product that the tender has..

Rigorous analysis and deliberation : Some observers maintain that good marketing is mostly an art and does not lend itself to rigorous analysis and deliberation. Others contend it is a highly disciplined enterprise that shares much with other business disciplines.

User Account

All Pages