A firm producing good Y recently increased monthly production from1,500 units to2,000 units. This
A firm producing good Y recently increased monthly production from1,500 units to2,000 units. This had no impact on the market price of good Y. At the new production level of2,000 units, thefirm's average cost is$3.5 while its marginal cost of production is$4. The marginal revenue however is fixed at$5 for all levels of output. Jake Williamson is the operations head of the firm. Jake feelsthat, since the firm has thecapacity, it should have increased production further to2,500 units which would have maximized profits. On the otherhand, Mathew Hayden of the market research team anticipates an increase in price to$5.5 in the near future. He therefore claims that the firm may not be maximizing economic profit in the short run even at2,500 units.
Which of the following is most strongly implied by this information?
A.The demand curve currently faced by the firm is horizontal at $4.
B.At the current level of production, the firm is making a profit of $3,000.
C. Mathew feels that the demand curve faced by the firm will shift downward.
D. The current price of good Y is equal to $4.
Please explain too
Notice: Undefined index: payment_status in /home/aceyourh/studycourse.fun/wp-content/themes/premier/page-templates/paper-detail.php on line 248
This question was answered on: Oct 14, 2020
This attachment is locked
We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy (Deadline assured. Flexible pricing. TurnItIn Report provided)
Notice: Undefined variable: ip_country in /home/aceyourh/studycourse.fun/wp-content/themes/premier/page-templates/paper-detail.php on line 456
Need a similar solution fast, written anew from scratch? Place your own custom order
We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.