Competitive Firm Incurs Economic Loss

Related BrainMass Solutions

• Economics multiple choice

  If a perfectly competitive firm incurs an economic loss, it might not necessarily shut down. It would take the least costly measure. Staying open would be an option as long as its loss is less than its fixed costs.

• Perfect competition

  The firm cannot avoid incurring its fixed costs but it can avoid variable costs - A firm that shuts down and produces no output incurs a loss equal to its total fixed cost.

• Market structure questions

  If a perfectly competitive firm incurs an economic loss, it should D) shut down if this loss exceeds fixed cost. If the firm shuts down, it incurs an economic loss equal to total fixed cost.

• perfectly competitive firm

  exceeds its ATC, then the firm c) is earning an economic profit (see part 2 for explaination) 4) For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss

• Monopoly and monopolistic competition

  Manny, the monopolistically competitive firm, is not receiving an economic profit nor incurring an economic loss. This condition further means that firms have no incentive to enter or exit the industry.

• Costs and price in a perfectly competitive firm

  What is the fixed cost of this firm? b. What is the optimal output of this firm? c. What is the economic profit or loss of this firm? d.

• Calculating Economic Profit/loss

  Based on this information, the firm is: A) earning an economic profit of $600. B) earning an economic profit of $1,200. C) incurring a loss of $600. D) incurring a loss of $1,200.

• Probability: Are employment and economic trend independent?

  Determine the probability of a positive economic trend given an increasing employment. Are employment and economic trend independent? A competitive firm estimates its average variable cost function to be .

• four market types

  For monopolistic competitive firm when P>ATC cost the firm earn an economic profit and when P< ATC the firm incurs a loss. In long run also a monopolistic firm can maximize its profit by producing output at the level where MR=MC.