Podcast
Questions and Answers
What is the main reason why the farm decides to stay in operation despite making losses?
What is the main reason why the farm decides to stay in operation despite making losses?
- Because the price is below the average total cost
- Because the price is above the marginal revenue
- Because the price is above the average variable cost (correct)
- Because the price is above the average fixed cost
If the price declined to $1.50 per pack, what would be the total revenue of the farm at a quantity of 60?
If the price declined to $1.50 per pack, what would be the total revenue of the farm at a quantity of 60?
- $60
- $150
- $120
- $90 (correct)
What would be the overall loss of the farm if it continues to operate at a price of $1.50 per pack?
What would be the overall loss of the farm if it continues to operate at a price of $1.50 per pack?
- $60
- $75 (correct)
- $90
- $45
Why is shutting down preferable to selling at a price of $1.50 per pack?
Why is shutting down preferable to selling at a price of $1.50 per pack?
What is the shutdown point of the farm?
What is the shutdown point of the farm?
If the farm decides to shut down, what would be its overall loss?
If the farm decides to shut down, what would be its overall loss?
What is the profit maximizing choice for the farm when the price is above the average variable cost?
What is the profit maximizing choice for the farm when the price is above the average variable cost?
What is the relationship between the price and the average variable cost at the shutdown point?
What is the relationship between the price and the average variable cost at the shutdown point?
What is the main difference between fixed costs and variable costs?
What is the main difference between fixed costs and variable costs?
What is the purpose of the shutdown rule in the context of the farm's decision-making?
What is the purpose of the shutdown rule in the context of the farm's decision-making?
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