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Marina CMI [18]
4 years ago
9

If short-run marginal cost and average variable cost curves for a competitive firm are given by SMC = 2 + 4Q, and AVC = 2 + 2Q,

a)how many units of output will it produce at a market price of $10? (15 points)b)At what level of fixed cost will this firm earn zero economic profit?
Business
1 answer:
sukhopar [10]4 years ago
8 0

Answer:

units of output  = 2 units

fixed cost = 8

Explanation:

given data

SMC = 2 + 4Q

AVC = 2 + 2Q

to find out

how many units of output will it produce at a market price and what level of fixed cost will this firm earn zero economic profit

solution

we know here that  under perfect competition

so at the equilibrium here Price (P)  will be = MC

P = MC = 10

and

SMC = 2 + 4Q ,

P = 2 + 4Q

10 = 2 + 4Q

Q = 2 units

and

at zero economic profit we get

TR = TC    

TR = P × Q

TR = 10 × 2

TR = 20

so

TC = TFC + TVC

20 = TFC + 12    

TFC  = 8

because here [ TVC = AVC × Q ]

[ TVC = (2 + 2 × 2) × 2 ]  

[ TVC = 12 ]

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Answer:

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3 years ago
The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: Cash balance
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Answer:

A)

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3 years ago
If a U.S.-based automobile parts supplier were to apply a global mind-set to its internal analysis, it would: a. review sales da
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6 0
2 years ago
Which of the following is recorded in a country’s balance of payments accounts?
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Answer:

Considering there are no options to pick from, the following accounts are recorded in a country’s balance of payments accounts:

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2. The capital account is also a country’s balance of payments account that documents all the international capital transfers of a country.

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