"Chapter 8, problem #7 (page 175). Briefly explain your answers for parts a, b, and c in a post not to exceed 200 words.;7. Do you agree or disagree with each of the following statements? Explain your reasons.;a. For a competitive firm facing a market price above average total cost, the existence of economic profits means that the firm should increase output in the short run even if price is below marginal cost.;b. If marginal cost is rising with increasing output, average cost must also be rising.;c. Fixed cost is constant at every level of output except zero. When a firm produces no output, fixed costs are zero in the short term.
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