Question

A perfectly competitive firm is in the following situation: output = 6000 units; market price = $2; total fixed cost = $7000; total variable cost = $6000; marginal cost =$3. This firm should do which of the following: reduce output but not shut down to maximize short-run profit. increase output to maximize profit. not change output since profit is already maximized. shut down immediately. raise price above $3 to maximize profits.

Name: a perfectly competitive firm is in the following situation output 6000 units market price 2 total fixed cost 7000 total variable cost 6000 marginal cost 3 this firm should do which of the fo 77033
Uploaded: 2023-08-16T18:51:49-08:00
Duration: 2 min 12 s
Channel: Lottie Adams
Description: a perfectly competitive firm is in the following situation output 6000 units market price 2 total fixed cost 7000 total variable cost 6000 marginal cost 3 this firm should do which of the fo 77033

          A perfectly competitive firm is in the following situation: output = 6000 units; market
price = $2; total fixed cost = $7000; total variable cost = $6000; marginal cost =$3.  This firm should do which of the following:
reduce output but not shut down to maximize short-run profit.
increase output to maximize profit.
not change output since profit is already maximized.
shut down immediately.
raise price above $3 to maximize profits.

Added by Allison B.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Lottie Adams

08/16/2023

Step 1

Total cost (TC) = Total fixed cost (TFC) + Total variable cost (TVC) TC = $7000 + $6000 = $13000 Total revenue (TR) = Market price × Output TR = $2 × 6000 = $12000 Profit = Total revenue - Total cost Profit = $12000 - $13000 = -$1000 Since the firm is making a Show more…

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A perfectly competitive firm is in the following situation: output = 6000 units; market price = $2; total fixed cost = $7000; total variable cost = $6000; marginal cost =$3. This firm should do which of the following: reduce output but not shut down to maximize short-run profit. increase output to maximize profit. not change output since profit is already maximized. shut down immediately. raise price above $3 to maximize profits.