HomeworkLib
Question
Help with #6 and 7 please
6. Assume XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 pe
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Q6

Answer

Option D

Economic profit =TR-TC

TR=P*Q=20*10=200

TC=FC+VC=100+3*20=160

Profit=200-160=$40

=========

Q7

Answer

Option C

the firm may earn economic profit or loss in the short run but it earns zero economic profit in the long run as the firms in the market produces identical goods and the entry in the market is free so the firms produce at MC=ATC in the long run so the P=ATC and there is zero economic profit.

0 0
Add a comment
Know the answer?
Add Answer to:
Help with #6 and 7 please 6. Assume XYZ Corporation is producing 20 units of output....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Assume the Green Corporation is producing 25 units of output in a purely competitive market. The...

    Assume the Green Corporation is producing 25 units of output in a purely competitive market. The firm’s marginal revenue is $15. Its total fixed costs are $100 and its average variable cost is $3 at 25 units of output. This corporation is realizing an economic profit of $?

  • 1) Compared with a purely competitive industry, a monopolist produces a. more output at a lower...

    1) Compared with a purely competitive industry, a monopolist produces a. more output at a lower price. b. less output at a higher price. c. more output at a higher price. d. less output at a lower price. 2) Which one of the following statements about monopoly firms and firms in a purely competitive industry is true? a. In the long run, monopoly firms and firms in a purely competitive industry operate at the minimum point of their average total...

  • stion 11 Suppose the a purely competitive firm is producing 100 units of output and that...

    stion 11 Suppose the a purely competitive firm is producing 100 units of output and that P = $10 and MC = $8 at this level of output. Answer questions #17 - #19 using this information. wered nts out of 5 Flag #17) Is the firm maximizing profits? Explain your answer. Answer: No, profit is - $200 dollars to 12 Lot yet answered #18) Suppose you discover that average fixed costs are $2 and average variable costs are $7. Indicate...

  • 2.1) If the market price is $20, then this firm will maximize profits by producing ________ units of output. (1M) 2.2) If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ______

    Refer to the table below to answer the questions. qTFCTVCTCMCAVCATC0$100  $0$100  ----   --   1100401404040  140    21006016020  30   80    31009019030  30     63.334100124  224  343156   5100180  280 56  36   56   6100 264   364  84  44     60.677100  372    472  108  53.14  67.43 2.1) If the market price is $20, then this firm will maximize profits by producing ________ units of output. (1M)2.2) If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ________. (1M)2.3) If the market price is $84, then in the long run...

  • Question 7 5 pts Let's say that you know the following information for an oligopoly firm:...

    Question 7 5 pts Let's say that you know the following information for an oligopoly firm: Total Revenue equals $200 million. Variable Costs are $170 million. Fixed Costs equal $20 million. The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising). What recommendation do you have for this firm? Assuming the firm's costs remain the same, the firm should produce fewer products in order to decrease its marginal costs. The profit...

  • Exhibit 8-7 A firm's cost and MR curves In Exhibit 8-7, if this firm is currently producing 20 units of output, this...

    Exhibit 8-7 A firm's cost and MR curves In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm: Group of answer choices A. is at its profit-maximizing point. B. could increase profits by increasing output. C. could increase profits by decreasing output. D. should shut down. E. should decrease price. Cost, 25 MR revenues 22 (dollars) 20 Quantity

  • 1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual...

    1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual firm earning an economic profit, including MR, MC, AVC, and ATC. On the second, show the short-run market equilibrium price and quantity. Explain how the industry supply curve and the market equilibrium price and quantity are determined. 2. What is the relationship between the price on the two graphs? Why does this relationship exist? 3. Explain why a firm in a perfectly competitive industry...

  • all of them Question 1 (1 point) A firm producing a positive output level, covering variable...

    all of them Question 1 (1 point) A firm producing a positive output level, covering variable costs but making a loss in the short run O may nonetheless be doing the nest it can with respect to its profits O should exit the industry O should definitely shut down O is not maximizing profits O should either expand or contract its plant size Question 2 (1 point) The perfectly competitive firm's profits can be calculated as O (MR-ATC)Q O (P-AVC-AFC)Q....

  • Profit Functions Let the technology for producing golly-wompers be given by q L0.3K0.6. Assume the producers...

    Profit Functions Let the technology for producing golly-wompers be given by q L0.3K0.6. Assume the producers of golly-wompers are maximizing profits in a perfectly competitive market and that p, w, r >> 0. Let K be fixed at sixteen units over the short run. Find the short-run variable factor 1. demand [L(q)] and optimal short-run output [q(p, w, r; K)] functions. What are the optimal quantity of labor and output when p $10? $48, w = $6, and r =...

  • 74. If a perfectly competitive firm’s marginal cost of producing and selling the 100th unit of...

    74. If a perfectly competitive firm’s marginal cost of producing and selling the 100th unit of good X is $20 and the market price for good X is $30, then the firm will Group of answer choices increase its profits by producing more than 100 units of good X. decrease its profits by producing more than 100 units of good X. increase its profits by producing less than 100 units of good X. maximize its profits by producing exactly 100...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT