1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sauron [17]
3 years ago
12

A firm in a perfectly competitive market has a fixed cost of $1,000 and a variable cost of $500 while it is earning the revenue

of $510. In such a situation, the firm ________ shut down in the short run because _______________________________.
Business
1 answer:
grin007 [14]3 years ago
8 0

Answer:

Firm should not shut down, as it is able to cover its Average Variable Cost

Explanation:

Perfect Competition firms in Short Run : The firms produce even if their average revenue (price) < their average total costs (AC). They continue production until Average variable cost (AVC) ≥ per unit price (P) i.e average revenue (AR). This is called Shut Down Point. P lower beyond AVC implies that firm won't continue even in short run.

Given : Variable Cost (VC) = 500 ; Revenue (R) = 510

Average Variable Costs & Average Revenue are variable costs & revenue, per unit quantity. AVC = VC / Q ; AR (P) = R / Q

R i.e 510 > VC i.e 500

So, R/ Q i.e AR is also > VC / Q i.e AVC

Since AVC > AR (P), firm should not shut down

You might be interested in
At the price of $5 per pack of batteries, Duracell sells 10,000 packs of batteries and Energizer sells 15,000 packs of batteries
Verdich [7]

Answer:

28,000

Explanation:

To get this answer you have to assume perfect competition scenario, since in this case supply = demand. In this case:

At $7,5

Energizer sells 16,000 => Supply Energizer = 16,000

Duracell sells 12,000 => Supply Duracell = 12,000

Total Supply = 16,000+12,000

6 0
2 years ago
Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 20% of the next month's sales.
Colt1911 [192]

Answer:

The number of units that would appear in June's production budget are 297000 units.

Explanation:

The production in June will contain 80% units that relates to June's budgeted sales and 20% units that relate to July's budgeted sales. Thus, the number of units that are to be produced in June are:

June's Production = 0.8 * 295000 + 0.2 * 305000 = 297000 units

Thus, in June, 297000 units will be produced.

3 0
3 years ago
Read 2 more answers
Many business people believe that marketing should focus on factors other than financial goals, such as ___.
Sindrei [870]

Answer:

Corporate citizenry

Explanation:

Many business people believe that marketing should focus on factors other than financial goals, such as Corporate citizenry

3 0
3 years ago
Getting merchandise floor-ready entails:
Gre4nikov [31]

Answer:

The correct answer is option B

B) Ticketing and marking.

Explanation:

Isolating or classifying products and putting labels on them and price tags is ticketing and marking. Example is in the shopping mall where there are different sections and types of products ranging from beverages to detergents with their respective price in them.

3 0
3 years ago
The most appropriate match between type of product and type of process occurs as one moves away from the diagonal in the product
Pavel [41]

The given statement " The most appropriate match between type of product and type of process occurs as one moves away from the diagonal in the product-process matrix " is FALSE

Explanation:

An object is a tangible product which can be marketed or used to meet internal company specifications to external consumers. A method is systemic For example – a procedure can be used in order to create a commodity.

Different objects are clustered together in a process configuration.

Process models are suitable for small businesses that do not need a single product. All unit, equipment, and machines according to how a product is made are placed in a design layout.

5 0
3 years ago
Other questions:
  • Frank and Jasmere are both shopping for a new car. They are looking for a $20,000 loan to pay for the new car that they will pay
    13·1 answer
  • It is generally agreed internationally that the one thing that can most readily undermine equity, efficiency and integrity in th
    10·1 answer
  • Problem 2-16 Balance Sheet (LG2-1) Glen’s Tobacco Shop has total assets of $96.4 million. Fifty percent of these assets are fina
    10·1 answer
  • What general conclusions can be drawn about Eli’s situation? Check all that apply.
    12·2 answers
  • Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the N
    14·1 answer
  • The yield to maturity (YTM) on 1-year zero-coupon bonds is 8% and the YTM on 2-year zeros is 9%. The yield to maturity on 2-year
    13·1 answer
  • 1 Cash on hand at the company and not yet deposited at the bank. 6,400 2 EFT for monthly utility bill not yet recorded by the co
    7·1 answer
  • Four basic steps are used in an abc system. list the proper order of these​ steps, which are currently scrambled​ below:
    8·1 answer
  • Percy works two part-time jobs to help pay for college classes. On Monday, he works 3 hours at the library and 2 hours at the co
    14·1 answer
  • Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!