Econ 112 Take-Home Quiz 3 io AT VC 12. (Using the information in Figure #1). If
ID: 1121645 • Letter: E
Question
Econ 112 Take-Home Quiz 3 io AT VC 12. (Using the information in Figure #1). If the market price were firms would earn A. Positive economic profit B. Negative economic profit C. Zero economic profit 13, (using the information in Figure #1). If the market price were $10. firms would earn: A. Positive economic profit B. Negative economic profit C. Zero economic profit 14, (Using the information in Figure #1)·lf the market price were $4. firms would earn: A. Positive economic profit B. Negative economic profit C. Zero economic profit 15, (Using the information in Figure #1). The shut-down price is: A. $2 B. $4 C. $6 D. $8 16" (Using the information in Figure #1). The break-even price is: A. $2 B. $4 C. $6 D. $8 17. (Using the information in Figure #1). In the long run, firms would expect the market price to be: A. $8Explanation / Answer
12.
As it can be seen in the diagram at price $6, the ATC is equal to price.
It means at price $6.
Price= ATC=$6
Economic profit = Price - ATC
=6-6
=$0
Hence option C is the correct answer.
13.
As it can be seen in the diagram at price $10, the ATC is less than the price.
It means at price $10.
Price>ATC
Economic profit = Price - ATC
=10 - 6 (approx)
=$4
It means positive economic profit
Hence option A is the correct answer.
14.
As it can be seen in the diagram at price $4, the ATC is less than the price.
It means at price $4.
Price<ATC
Economic profit = Price - ATC
=4 - 6 (approx)
=-$2
It means negative economic profit.
Hence option B is the correct answer.
15.
The firm shut down price is $4 because at this price variable cost is equal to the price.
The shut down price'
Price =AVC
Hence option B is the correct answer.
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