6 7a firm will make a profit when ap afc bp avc cp

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Intermediate Financial Management
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Chapter 9 / Exercise 013
Intermediate Financial Management
Brigham/Daves
Expert Verified
6)7)A firm will make a profit whenA)P >AFCB)P >AVC.C)P =ATC.D)P =MC.E)P >
ATC.7)Table 11-3QuantityAverage FixedCost (AFC)AverageVariable Cost(AVC)Marginal Cost(MC)20$40$18$18402014106013.1162080102240100830621206.614090Table 11-3 shows the short-run cost data of a perfectly competitive firm. Assume that output can only be increased inbatches of 20 units.8)Refer to Table 11-3. If the market price is $45 the firm will produce
8)2
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Intermediate Financial Management
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Chapter 9 / Exercise 013
Intermediate Financial Management
Brigham/Daves
Expert Verified
Figure 11-39)Refer to Figure 11-3.For a perfectly competitive firm with the cost structure depicted in Figure11-3, suppose the market price is $120. Which of the following is true?9)
10)If a firm shuts down it
10)11)The supply curve of a perfectly competitive firm in the short run isA)the portion of the firm's marginal cost curve below the minimum point of the averagevariable cost curve.B)the portion of the firm's marginal cost curve above the minimum point of the average fixedcost curve.C)the portion of the firm's marginal cost curve above the minimum point of the average totalcost curve.D)the firm's average variable cost curve.E)the portion of the firm's marginal cost curve above the minimum point of the average variablecost curve.
11)3
Figure 11-412)Refer to Figure 11-4. At the profit-maximizing output level, the firm earns
12)Figure 12-113)Refer to Figure 12-1. The marginal revenue from one additional unit sold is the sum of the gain inrevenue from selling the additional unit and the loss in revenue from having to charge a lowerprice to sell the additional unit. Based on the diagram in the figure,
13)4

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