Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter20: The Global Economy
Section20.3: Multinationals And Economic Competition
Problem 5R
Related questions
Question
a. Are the following statements true or false? Explain your reasons.
For a firm with price in excess of average total cost, the presence of economic profits implies that the firm should increase output in the short
run even if price is below marginal cost.
If marginal cost is rising with increasing output, average cost must also be
rising.
Fixed cost is the same at each output level except when no output is
produced. When a firm produces no output, there are no fixed costs.
b. Allsmart’s demand curve is given by Q=10-P for its dishwashers. The marginal and average cost is $3 per dishwasher produced. Complete the following table.
Transcribed Image Text:Q
P
TR
MR
AC
VC
FC
TC
12
0
20
5
20
3
12
20
4567
18
20
28
20
36
20
44
20
8
48
20
9
50
20
10
52
20
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