Exam 9: Long-Run Costs and Output Decisions

The Supply Room, a mail-order school supply store, grew rapidly. As a result of achieving a much larger size, the Supply Room is able to realize (1) volume discounts when buying from its suppliers, and (2) lower transportation costs by shipping in bulk. The best explanation of this is that the Supply Room seems to be experiencing

Refer to the information provided in Figure 9.1 below to answer the questions that follow. Figure 9.1 -Refer to Figure 9.1. If this farmer is maximizing profits, his total costs will be

Refer to the information provided in Figure 9.1 below to answer the questions that follow. Figure 9.1 -Refer to Figure 9.1. This farmer would be breaking even if price was

Assume a perfectly competitive industry is in long-run equilibrium at a price of $20. If this industry is a constant-cost industry and the demand for the product decreases, long-run equilibrium will be reestablished at a price

Refer to the information provided in Figure 9.1 below to answer the questions that follow. Figure 9.1 -Refer to Figure 9.1. If this farmer is maximizing profits, his total revenue will be

The long run industry supply curve is made up of the zero-profit equilibrium levels of output as the industry expands due to entry of new firms.

Refer to the information provided in Figure 9.5 below to answer the questions that follow. Figure 9.5 -Refer to Figure 9.5. Assume this firm is in a constant-cost industry. For this firm to be in long-run equilibrium, the firm must be producing