ECN 320 ECN320 Module 5 Homework Solution (AAU Online)
PART I: SHORT RESPONSE
1.How do you find the most efficient output, and how do you find the most profitable output?
2.At the output at which a firm maximizes its profits, what two variables are equal?
3.At the output at which a firm minimizes its losses, what two variables are equal?
4.Is the analysis for maximizing profits the same as that for minimizing losses?
5.At the output at which MC = MR, suppose that price were higher than AVC, but lower than ATC. What should the firm do in the short-run and the long-run? Explain your answer.
6.What is the difference between the firm’s short-run supply curve and its long-run supply curve? Make up an example to explain your answer.
7.Does the perfect competitor always break even in the long run? Explain why or why not.
PART II – ESSAY
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