If a profit-maximizing, perfectly competitive firm is earning a loss because total revenue is less than total

Question:

If a profit-maximizing, perfectly competitive firm is earning a loss because total revenue is less than total cost, why must the market price be less than average total cost?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Exploring Economics

ISBN: 9781544336329

8th Edition

Authors: Robert L. Sexton

See More Books

Question Posted: Jan 17, 2023 05:26 AM

See More Questions

The marginal revenue for a perfectly competitive firm is equal to the market price. Why is the marginal revenue for a monopolist less than the market price for positive quantities of output?
If a profit-maximizing, perfectly competitive firm is earning a profit because total revenue exceeds total cost, why must the market price exceed average total cost?
Hospitals in City A are profit maximizing perfectly competitive firms. Hospitals in City B, on the other hand, are run by non-profit charities that try to minimize the long-run average cost of...
What types of costs are associated with a Stance" sock vending machine located in an airport? At Cleveland Hopkins International Airport in northeastern Ohio, a vending machine that dispenses socks...
Assume the following values for a stocks return and the market return. Plot the data and draw a line of best fit similar to that in Figure 1711. No equation is necessary. Stock i Retum (K) Market...
$\sim t ightarrow \sim s$ Translate the symbolic form of each compound statement into words. Given $p$ : "The median is the middle number," $q$ : "The mode is the most frequent number," $r$ :...
What are the five basic factors that must be considered when designing a process? LO.1
A severe winter ice storm has swept across North Carolina and Virginia, followed by over a foot of snow and frigid, single-digit temperatures. These weather conditions have resulted in numerous...
You want to be able to withdraw $50,000 each year for 15 years. Your account earns 9% interest. How much do you need in your account at the beginning?
If a profit-maximizing, perfectly competitive firm is earning zero economic profits because total revenue equals total cost, why must the market price be equal to the average total cost for that...
Why is a situation of zero economic profits a stable long-run equilibrium situation for a perfectly competitive industry?
Gwen and Mark are equal partners in the GM partnership. They share profits equally, but they agree to allocate 70% of the losses to Gwen and 30% to Mark. Their balance sheet includes the following:...
Briefly, discuss the use of survey research in exploratory, descriptive, explanatory, and evaluation studies. Using a criminal justice example select one type of research study and develop one...
Medical Helicopters In a study of helicopter usage and patient survival, results were obtained from 47,637 patients transported by helicopter and 111,874 patients transported by ground (based on data...
Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the...
cest Shouldice Hospital in Canada is widely known for one thing-hernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past two decades this...
The activation energy for the gas phase decomposition of isobutyl bromide is 211 kJ. (CH3)2CHCH2 Br (CH3)2C=CH2+ HBr The rate constant at 676 K is 5.73 x 10-4 s. The rate constant will be 0.00647 s...
Use this fractal-like figure as a guide in constructing fractal-like figures with the letter given. Show three steps, as is done here. E M
For each of the following reactions, express the equilibrium constant: a) H20 (I) H2 (g) + 02 (g) Ke = 1.0x107 b) Fe2 (g) 2F (g) Ke= 4.9 x 10-21 c) C (s) + O2 (g) d) H2 (g) + C2H4 (g) C2H6 (g) Ke =...
What is dumping? Who benefits and who loses from dumping? What problems arise when anti-dumping laws are implemented?
Maya spends her $50 budget on two goods, cans of tuna and bottles of ginger ale. Initially, the marginal utility per dollar she spends on tuna is equal to the marginal utility per dollar she spends...
You have six hours to study for two exams tomorrow. The following table shows the relationship between hours of study and test scores: a. Use the rule for determining optimal purchases to decide how...
Read the following and then answer the questions below:September 12: A Brisbane business offers by letter to sell 500 tyres to a New Zealand company. The Brisbane company does not specify a method of...
Fred returns home from work one day to discover his house surrounded by police. His wife is being held hostage and threatened by her captor. Fred pleads with the police to rescue her and offers...
Would like you to revisit one of these. Consideration must be clear and measurable.if you can't measure it then how can you show it has / has not been done?How can you sue someone for breach of...

If a profit-maximizing, perfectly competitive firm is earning a loss because total revenue is less than total

Question:

Step by Step Answer:

If total revenue is less than total cost total re...View the full answer

Exploring Economics

Students also viewed these Business questions