“IBM should never sell its product for less than it costs to produce.” If “costs to produce” is interpreted to mean IBM’s average total cost, is this correct? If it is interpreted to mean average variable cost, is the statement correct? If it is interpreted to mean marginal cost, is the statement correct?
Answer to relevant QuestionsIn Table 9.1, suppose that variable input prices increase by 50 percent. Will the firm’s profit-maximizing output level change? Illustrate your answer with a graph.“If Conagra is a competitive firm, it will never operate at an output where its average total cost curve is downward sloping.” True or false? Explain.Using long- run supply and demand curves, analyze the effects of an ad valorem excise tax equal to 20 percent of the market (selling) price of gasoline. How do the effects differ from those of the per- unit excise tax ...Ghana is a producer and exporter of crude oil. Since Ghana is a relatively small crude-oil-producing country, its actions do not affect world prices; as an exporter, Ghana faces a foreign demand curve that is perfectly ...Suppose that the MC faced by Skechers is a constant $ 10 per shoe. If the demand elasticity for Skechers shoes is also constant and is equal to 5, what price should Skechers charge for its shoes?
Post your question