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Softa [21]
4 years ago
5

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4

.00. The average variable cost is $3.50. The market price of the product is $3.00. To maximize profits or minimize losses, the firm shouldA. Continue to produce 500 units
B. Produce less than 500 units
C. Produce more than 500 units
D. Shut down
Business
1 answer:
posledela4 years ago
7 0

Answer:

D. Should Shut Down

Explanation:

A perfect competition firm is at profit maximising equilibrium where : Marginal Revenue [Price] = Marginal Cost .

If MR > MC : Firm's additional production is profitable, it tends to increase production. If MR < MC : Firm's additional production is loss making, it tends to decrease production.

However, If firm's Price i.e MR < Average Variable Cost : The firm's per unit price is even unable to cover it's per unit average variable cost. This situation is referred to as 'Shut Down' point & firm should close down its production in the case.

Given : MR = P = 3 ; MC = 4 ; AVC = 3.5 . The firm's price P (3) is not only lesser by its Marginal Cost MC (4), to decrease production ; but also lesser than its Average Variable Cost AVC (3.5) . So, the firm should shut down.

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Dans un environnement de concurrence imparfaite, les entreprises vendent différents produits et services, fixent leurs propres prix, se battent pour des parts de marché et sont souvent protégées par des barrières à l'entrée et à la sortie, ce qui rend plus difficile pour les nouvelles entreprises de les concurrencer.

Explanation:

3 0
2 years ago
What happens when a bank is required to hold more money in reserve?
valina [46]

The thing that happens when a bank is required to hold more money in reserve is It has less money for loans.

<h3>What happens when reserve requirements are increased?</h3>

Banks are known to often hold a lot of reserves if reserve requirements are increased.

This is because it is one that they can be able to use if they want to loan out less of each dollar that is said to be deposited. By raising the the reserve ratio, and also lowers the money multiplier, and lowering the money supply.

Therefore, The thing that happens when a bank is required to hold more money in reserve is It has less money for loans.

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8 0
1 year ago
A dynamic capability is the Group of answer choices functional and operating resources management process. ongoing capability to
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Answer:

ongoing capacity to modify existing resources and capabilities to create new ones.

Explanation:

A dynamic capabilities can be simply defined as the ability of an organisation or firm to blend, build and reshape both the internal and external aspect of an organisation so as to get/produce an outcome that is needed by the organisation/firm. it is a series of processes in organisations that brings about a required needed outcome. DC gives organisation an advantages or an edge over others as companies or organisations has restructured/reconfigure their organisation for better performance.

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3 years ago
What is the molecular unit of heredity of a living organism?
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The molecular unit of heredity of a living organism is a gene.

7 0
3 years ago
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The policy document provides guidelines to promote information sharing is DoD Manual 5200.01, Volumes 1 and 2

<h3>What is information sharing?</h3>

The policy that promote information sharing, certain guidelines must be followed in DoD Manual 5200.01, Volumes 1 and 2, when classifying and marking information.

The DoD Manual does the following:

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Therefore, the policy document that provides guidelines to promote information sharing is contained in the DoD Manual 5200.01, Volumes 1 and 2

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