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what is a key factor that determines a firm's profitability?
 
A) differentiation of a firm's product from other products
B) factors affecting a firm's entire market
C) a firm's average cost of production relative to that of competing firms
D) chance events
E) all of the above

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Jean Keeling
Jean KeelingLv2
28 Feb 2020

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Related questions

1. A firm's total cost of producing 50 units of output is $1,000. At this output level, average fixed costs are equal to $10. It follows that the firm's average variable costs are equal to _____.

2. To maximize profits, a price-taking (i.e., competitive) firm should produce its output up to the level where

a. the market price of the firm's product is equal to its total variable cost.

b. the market price of the firm's product is equal to its s total cost.

c. the market price of the firm's product is equal to its marginal cost.

d. marginal cost is equal to average cost.

e. none of the above.

3. To minimize losses, a competitive firm should shut down if the price is less than

a. average cost.

b. average variable cost.

c. total cost.

d. marginal cost.

e. average total fixed cost

A competitive firm's cost of production is C(Q) = 16Q - Q^2 + 4Q^3.

(a) Calculate and draw the firm's average and marginal cost functions. The firm's problem is to choose the quantity that maximizes profit, given an exogenous market price P.

(b) Does this problem satisfy the global second order condition?

For parts (c) and (d), assume that the market price is P=26.

(c) Calculate the quantities that satisfy the firm's first-order condition. Which of these quantities

satisfies the local SOC?

(d) Calculate the firm's profit-maximizing quantity. Justify your answer carefully. Calculate the

firm's highest attainable profit.

(e) Carefully draw the firm's supply curve. What is the lowest price at which the firm is willing to

produce? You should show the exact coordinates of the supply curve at that price and the exact

coordinates of the supply curve at the points where P=10 and P=26.

(f) In what circumstances should the firm choose Q=1/10?

(g) Calculate the firm's inverse supply function, for the range of quantities where the firm has

Suppose that each firm in a competitive industry has the following costs:

Total cost: 

Marginal Cost: 

where  is an individual firm's quantity produced. The market demand curve for this product is

Demand: 

where  is the price and  is the total quantity of the good.

1. What is each firm's fixed cost?

2. What is each firm's variable cost?

A. 

B. 

C. 

D. 

3. Which of the following represents the equation for each firm's average total cost?

A. 

B. 

C. 

D. 

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