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if marginal production costs exceed marginal revenues, the firm will suffer losses, not profits.

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11y ago

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Why do some firms price discriminate?

to reduce the quantity sold so as to reduce production costs. to take advantage of customers. to increase profits. to increase total economic surplus.


What happens to prices and jobs during a recession?

When Corporations endure economic downturn, they must adjust to the economic slowdown. They will keep profits up by doing one or more of the following: Depress wages, Lay off workers, Increase prices, Reduce the pay to shareholders etc.


Why does quantity supplied tend to increase when prices go up and decrease when prices go down?

Quantity supplied tends to increase when prices rise because higher prices incentivize producers to supply more of a good or service, as they can achieve greater revenue and potentially higher profits. Conversely, when prices fall, the profit margin decreases, leading producers to reduce the quantity they supply, as it may no longer be economically viable to produce at those lower prices. This relationship is a fundamental principle of the law of supply in economics.


How does collusion improve the financial standing of firms?

Collusion can improve the financial standing of firms by allowing them to work together to manipulate prices, reduce competition, and increase profits. This can lead to higher revenues and market power for the colluding firms, ultimately boosting their financial performance.


What does Economic profits in an industry suggest that the industry?

Economic profits in an industry suggest that the industry is operating efficiently and that firms within it are earning returns above the normal profit level. This can attract new entrants, leading to increased competition. Over time, as new firms enter, the supply may increase, which can drive prices down and reduce economic profits, moving the industry toward a long-term equilibrium. Ultimately, sustained economic profits may indicate that firms have a competitive advantage or that there are barriers to entry protecting them from competition.

Related Questions

Why do some firms price discriminate?

to reduce the quantity sold so as to reduce production costs. to take advantage of customers. to increase profits. to increase total economic surplus.


Why did the food industry start hydrogenating fats?

To improve shelf-life, reduce spoilage, and increase profits.


What happens to prices and jobs during a recession?

When Corporations endure economic downturn, they must adjust to the economic slowdown. They will keep profits up by doing one or more of the following: Depress wages, Lay off workers, Increase prices, Reduce the pay to shareholders etc.


What happens to prices and jobs during recession?

When Corporations endure economic downturn, they must adjust to the economic slowdown. They will keep profits up by doing one or more of the following: Depress wages, Lay off workers, Increase prices, Reduce the pay to shareholders etc.


Why does quantity supplied tend to increase when prices go up and decrease when prices go down?

Quantity supplied tends to increase when prices rise because higher prices incentivize producers to supply more of a good or service, as they can achieve greater revenue and potentially higher profits. Conversely, when prices fall, the profit margin decreases, leading producers to reduce the quantity they supply, as it may no longer be economically viable to produce at those lower prices. This relationship is a fundamental principle of the law of supply in economics.


How do you reduce break even?

Reduce costs or increase prices - although you need to bear in mind that neither may be possible.


How does collusion improve the financial standing of firms?

Collusion can improve the financial standing of firms by allowing them to work together to manipulate prices, reduce competition, and increase profits. This can lead to higher revenues and market power for the colluding firms, ultimately boosting their financial performance.


How does the invisible hand of competition set a market price in market economies?

Shortages always raise prices and surpluses always reduce prices until competition produces a price where there are no more surpluses or shortages.


How an increase in unit selling prices might affect contribution margin?

Increase in unit selling price while other costs remains same will increase the contribution margin and reduce the breakeven point.


What can the UN do to help future famine in Africa?

Give out free / subsided seeds to increase food harvest and reduce food prices.


What is nubarter?

NuBarter is a community of global businesses that barter their goods and services. They provide an effective way to increase sales, reduce cash expenditures, and increase profits. Their experienced team of professionals offers an innovative and proven approach to business.


How does the invisible hand of competition set a market price in a market economy?

b. Shortages always raise prices and surpluses always reduce prices until competition produces a price where there are no more surpluses or shortages. ;D