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If the price is between average variable cost and average total cost then the firm?
Wiki User
∙ 15y ago
Stays in the market (In the short run). This is because it is able to pay for some of the fixed costs(F) rather than incurring a total loss of F by exiting the market. In the long run, however, it will have to exit the market.
Wiki User
∙ 15y ago
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What is the difference between average total costs and average variable costs?
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.
What is cost What is the difference between total cost and average cost?
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.
What is the meaning of shutdown point?
The shutdown point is the output level at which total revenue is equal to the total variable cost. Here the product price is also equal to its average variable cost.
What is the formula to find the average variable cost?
Average Variable Cost = Total Variable Cost/ Quantity Average Cost = Average Fixed Cost + Average Variable Cost Average Cost = Total Cost/Quantity
Is selling price and total variable cost the same?
Selling price = Total Cost (Total Variable cost + Total fixed cost) + profit margin
When price exceeds average variable cost but not average total cost the firm should in the short run?
Minimize total losses by producing at the rate of output where ATC is minimized.
What effect will an increase in output have on average fixed average variable and average total cost?
average fixed will go down, average variable will remain the same, and average total will go down.
What is the average price of Raleigh NC Homes?
It would seem that the average price per square foot for homes in Raleigh is $115. The average total price for a house there is between $175,000 and $239,391.
Can you explain the shut down rule in perfect competition?
Shut-down point is when Price equals Minimum Average Variable Cost. At this point the firm is indifferent between producing or shutting down. This is because at the point Total Revenue is equal to Total Variable Cost, so by producing or shutting down, the firm is making a Loss equal to Total Fixed Costs no matter what it chooses to do
Can you explain the shut-down rule in perfect competition?
Shut-down point is when Price equals Minimum Average Variable Cost. At this point the firm is indifferent between producing or shutting down. This is because at the point Total Revenue is equal to Total Variable Cost, so by producing or shutting down, the firm is making a Loss equal to Total Fixed Costs no matter what it chooses to do
What is Total variable costs?
Total variable costs are the sum of expenses which change proportionally as the price of services and goods fluctuate. The total marginal costs above produced units is also referred to as total variable costs.
Are Fixed costs are the difference between total costs and average variable costs?
No. But: ATC = AVC + AFC Or TC = VC + FC
