Once a firm reaches the lowest point on the Long Run Average Total Cost Curve then the firm will automatically charge a lower prices for their product or service. The cost analysis model that we studied in Chapter 9 said that this is always the best strategy to effectively capture the maximum market share. A- True
B- False

B. False

Explanation:

As it is mentioned in the question that When a firm reaches a lowest point on the Long Run Average Total Cost Curve then it automatically charged a less price for the product and services they are rendering to the customer. But this lowest point deals in the only perfect competition also it would not capture the maximum market share but it would result into optimum production and goods supply at minimum price

The total amount Sandra was paid=$1,500

The total amount Bobby was paid=$1,750

Explanation:

Step 1

Determine the net loss or profit from sales as shown;

profit=sale price-purchase price

where;

sale price=$26

purchase price=$1

replacing;

profit=26-1=$25

Step 2

In a perfectly competitive labor market, the labor market defines the price of labor. In our case,

The value of each person marginal product can be expressed as;

Value of marginal product for Sandra=(25×60)=$1,500

Value of marginal product for Bobby=(25×70)=$1,750

The total amount Sandra was paid=$1,500

The total amount Bobby was paid=$1,750