Variable costs have no impact on marginal costs

Assignment Help Microeconomics

Reference no: EM13733958

1. TRUE or FALSE: ‘The output of any one purely competitive firm is so small relative to market output that it has to accept the output desired by customers in that market.' EXPLAIN and use DIGRAM to answer.

2. Use marginal and average cost and revenue curves for a perfectly competitive firm to show (DIAGRAM)

(a) a short-term loss situation;
(c) an economic profit situation;
(b) a normal profit situation

3. EXPLAIN AND DRAW DIAGRAM of the long run position of pure competitive firm?

4. ‘Competitive market economy will allocate the limited resources available to society in such a way as to maximise the satisfaction of consumers'. EXPLAIN the above statement using the concept of Productive and Allocative efficiency DIAGRAM.

LIVING CASE STUDY (EXPLAIN & DIGRAMS)

1. If Coglin Clothing is a perfectly competitive firm, explain how the firm will determine its price and profit maximising level of output.

2. Assume Coglin Clothing is faced with the following situation: market price is $10, AFC = $3, AVC= $7 and it is producing at MC=MR= 12 units. Explain whether this firm is faced with economic profit or loss. What should this firm do in the short run?

3. Assume that Coglin Clothing, a perfectly competitive firm, is currently operating at normal profit situation. Discuss the likely impact on this firm in the short run if there is now a decrease in the demand for its product. What will happen in the long run?

Please EXPLAIN including DIAGRAMS to answer to the following TRUE or FALSE questions.

1. Variable costs have no impact on marginal costs in short run.

2. Marginal product is the change in revenue associated with the selling of one more unit of output.

3. Purely competitive firms have to accept both the output and price from the market.

4. For a firm in pure competition, the profit maximisation rule is either MR=MC or P=MC or AR=MC.

5. For individual firm under pure competition, zero economic profit happens when price equals average variable cost.

6. A competitive firm faced with a price that is below its average total cost will minimize its losses by continuing to operate.

2190_Marginal and average cost and revenue curves.png

7. In Graph 1 assume that the market price is 0D. A firm producing an output of 0Qm would make a loss equal to its fixed costs.

8. In Graph 1, if we assume that 0Qm is the profit maximising level of output, then MR equals 0C.

9. The short run supply curve for a firm that has the cost curves as in Graph 1 is the rising part of MC above average total cost.

10. A firm with a market price lower than 0D will minimize losses by producing zero rather than 0Q2.

Reference no: EM13733958

Questions Cloud

Foreign direct investment and financial risk assessment : The company is a manufacturing firm with annual earnings in excess of $350 million - Using Porter's Five Forces as a strategic guide, please explain how you will approach Foreign Direct Investment and Financial Risk Assessment.

Describe the legal-cultural and ethical challenges : Describe the legal, cultural, and ethical challenges that confront the global business presented in your selected case study.

Rank decisions based on various management strategies : Rank decisions based on various management strategies and Construct performance baselines and manage and measure performance

How nail came and the significance to your society : Historical information on how Nail came and the significance to your society, economically, and practically.

Variable costs have no impact on marginal costs : Variable costs have no impact on marginal costs in short run and marginal product is the change in revenue associated with the selling of one more unit of output.

Advantage that will be necessary to achieve success : discuss why your approach (as written in your MP) will actually work. That is, have you identified a competitive advantage that will be necessary to achieve success

Write an essay about lincoln : I need one page or more about lincoln when he died a full believer in the abolishment of slavery and talk about how what he did changed the world and how life was after his death.

Executive summary of your comprehensive project : Post an executive summary of your Comprehensive Project in the body of a post in this discussion (please do not use attachments)

Who were the revolutionaries and what were their class : Tunisia: Who were the revolutionaries, what were their class, ethnicity and religion? What were the key divisions among them?

User Account

All Pages