Consider the Following Total Cost Schedule for a Perfectly Competitive

question 32

Multiple Choice

Consider the following total cost schedule for a perfectly competitive firm producing ball- point pens. $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Output } \\\text { per period }\end{array} & \text { TVC } ( \$ ) & \text { TFC } ( \$ ) \\\hline 0 & 0 & 5 \\\hline 10 & 2 & 5 \\\hline 20 & 3 & 5 \\\hline 30 & 6 & 5 \\\hline 40 & 10 & 5 \\\hline 50 & 15 & 5 \\\hline\end{array}$$ TABLE 9- 3
-Refer to Table 9- 3.This firm would shut down in the short run if the market price of its output

• A)dropped below $0.15.
• B)dropped below $0.20.
• C)dropped below $0.30.
• D)dropped below $2.00.
• E)dropped below $3.00.

Interpret the importance of technology and input prices in determining production costs.

Evaluate the productivity impact of external assistance programs on firm performance.

Apply the concept of isocost lines in analyzing changes in production costs.

Understand how operational decisions, such as driving speed, affect cost efficiency in a business context.

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