Short run until price falls below average variable cost

Assignment Help Business Economics

Reference no: EM131101574

Explain why firms should not shut down in the short run until price falls below average variable cost. 3. Suppose your economics professor publicly states that she grades on a curve (i.e., the top 10% of the students get an A, the next 20% get a B, the next 40% get a C, the next 20% get a D, and the lowest 10% fail). The whole class could save itself a lot of work by agreeing privately not to study at all for the final exam and just letting the rankings thus far determine the final grades. Why might such an agreement be difficult to maintain and enforce? Which market structure, if any, is this situation most analogous to?

Reference no: EM131101574

Questions Cloud

Differentiate them from competitor-build consumer preference : The Body Shop, Timberland, and Patagonia behave in environmentally responsible ways that differentiate them from competitors, build consumer preference, and achieve notable sales and profit gains. This is an example of ________.

Monopolies in that monopolistically competitive industries : Monopolistically competitive industries differ from monopolies in that monopolistically competitive industries:

What was the intended impact of these government policies : This is related to China's Economy from 2000-2012 What did the government do during this time to either help or hinder the improvement of the economy? What was the intended impact of these government policies?

What would be equilibrium price and quantity : A monopolist sells travel services to two groups of people with the following demand curves Q1 = 100 – 2P1 (and MR1 = 50 – Q1) and Q2 = 60 – P2 (and MR2 = 60 – 2Q2) . The marginal cost of providing one unit of travel service to either of the groups i..

Short run until price falls below average variable cost : Explain why firms should not shut down in the short run until price falls below average variable cost. 3. Suppose your economics professor publicly states that she grades on a curve

Gigantic firms guarantee consumers lower prices : Another student advocates the forced break-up of large firms, such as Microsoft and AT&T, on the grounds that they have a lot of monopoly power, which they use to charge inefficiently high prices. According to Schumpeter, would breaking apart these g..

Rising unemployment along with rising inflation : Is the Phillip's Curve an outdated theory and that there is a positive correlation between changes in CPI and unemployment (that we have generally seen rising unemployment along with rising inflation)?

The market supply of labor is always upward sloping : The market supply of labor is always upward sloping, but an individual’s labor supply curve may not be upward sloping throughout its entire range. Both the market supply of labor and the individual’s supply will both be upward sloping.

Assume blonds and brunettes are equally productive : Assume blonds earn $3 less per hour than brunettes and a firm employs 300 workers. There are 8 working hours in a day. If this firm refuses to hire blonds because of discrimination, how much profit will it gain/lose in a day? (Assume blonds and brune..

User Account

All Pages