- 3 Pes Question 12 Part 1 Of A 2 Part Question The Xyz Gadget Company Currently Faces The Following Short Run Marginal C 1 (185.21 KiB) Viewed 34 times
- 3 Pes Question 12 Part 1 Of A 2 Part Question The Xyz Gadget Company Currently Faces The Following Short Run Marginal C 2 (171.82 KiB) Viewed 34 times
- 3 Pes Question 12 Part 1 Of A 2 Part Question The Xyz Gadget Company Currently Faces The Following Short Run Marginal C 3 (190.91 KiB) Viewed 34 times
3 pes Question 12 Part 1 of a 2-part question: The XYZ Gadget Company currently faces the following short-run marginal cost (MC), average variable cost (AVC) and average total cost (ATC) curves: ATC MC P2 AVC P1 1 w q 91 92 If the market price is P1, then XYZ will: produce zero units of output and earn a profit equal to
ATC MC P2 AVC Pa q 91 92 If the market price is P1, then XYZ will: O produce zero units of output and earn a profit equal to zero. O produce zero units of output and earn a negative profit. O produce q, units of output and earn a profit equal to zero. O produce q, units of output and earn a negative profit. O produce q, units of output and earn a positive profit.
3 pts Question 13 Part 2 of a 2-part question: Following up on the preceding question, suppose XYZ's cost curves are unchanged, but now the market price is P2. Faced with this new, higher price XYZ will: O a) produce q2 units of output and earn a positive profit. O b) produce q2 units of output and earn a profit equal to zero. O c) necessarily face constant returns to scale. O d) necessarily begin the process of reducing capital. O e) Answers b), c) and d) are all correct.