User Account

All Pages

Why is the distinction between fixed and variable cost

Assignment Help Business Economics
Reference no: EM132456942

If a perfectly competitive firm finds that price is less than average variable cost, it should shut down. If price is less than average variable cost, a firm cannot even cover its variable costs and therefore has no incentive to operate. Why is the distinction between fixed and variable cost important?

Reference no: EM132456942

Questions Cloud

Define business level strategy : Define Business Level Strategy using different scholarly sources. Give, at least, five real life examples of when business level strategies were applied.
Find the supply curve : a) Find the supply curve. Find the short run market supply curve b) Find the equilibrium price P*and qQ* in the market in the short run.
Explain the practice of defensive medicine : Which model, the supplier-induced demand (SID) or the McGuire quantity-setting model, is better to explain the practice of defensive medicine?
Discuss the pros and cons for passing or defeating of bill : As a junior congress person you have been asked to help promote a bill to allow casino gambling in your state. There is much opposition to this bill
Why is the distinction between fixed and variable cost : If price is less than average variable cost, a firm cannot even cover its variable costs and therefore has no incentive to operate.
What parts of the world have made the greatest gains : What parts of the world have made the greatest gains in literacy? What parts lag behind? Do you note age or gender differences in literacy?
Have any categories experienced price declines : For which categories of spending have prices increased the most? Have any categories experienced price declines?
Discuss team leadership and management style : What style (coaching or directing) did that leader administer? Was he or she effective in leading you as part.Discuss Team Leadership and Management Style
Establishing and protecting property rights : Why does the most important income distribution decisions that the government makes involve establishing and protecting property rights?

Reviews

Write a Review

Business Economics Questions & Answers

  Should the project be undertaken

Should the project be undertaken? Why or why not? What is the project's IRR or XIRR?

  Nations marginal propensity to consume

Assume that a nation’s marginal propensity to consume is 0.9, and that its potential GDP exceeds its actual real GDP by $5000. By how much should that nations’ government change taxes in order to completely close that GDP gap?

  Compare and contrast the characteristics of two markets

Compare and contrast the characteristics of two markets - a monopoly market compared with a perfectly competitive market.

  Democracy and capitalism natural enemies

Why did prior to 1945 nearly all neoclassical economists agreed that democracy and capitalism were natural enemies?

  Organization rank projects that should be attempted

Once a project is evaluated to be "acceptable" how does (or should) your organization rank projects that should be attempted?

  Firm discounts the cash flows of the project

The estimated beta of this project is 1.50. If the firm discounts the cash flows of the project at the WACC, they run the risk of

  Argument for tariff is the optimum tariff argument

In a competitive model, the only valid argument for a tariff is the Optimum Tariff Argument. All other arguments are ones for subsidies.' Discuss.

  Valid arguments for tariff protection

Which of the following are valid arguments for tariff protection?

  How to make decisions based on opportunity cost

What are opportunity cost and some examples in every day life? Discuss how to make decisions based on opportunity cost.

  Firm has monthly cash expenses

The firm has monthly cash expenses of $180.what is the projected ending cash balance at the end of February.

  Explai how monopoly on boat sales in the region

Homer's boat manufacturing has a monopoly on boat sales in the region. Homer's marginal cost of the 8th boat produced is $1,200. He produces only eight boats and can sell all eight boats for $1,500. The elasticity of demand at this price is -2. Is..

  Firms production function

Suppose that a firm's production function is given by U=K.33 * L.67, where marginal product of capital is QK = .67(K-0.67 * L.67) and MPL is QL = .67(K.33 * L-.33).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd