Homework Answers
In order to earn a positive economic profit, price should be above minimum ATC, As minimum ATC is 600
So in order for firm to earn profit, minimum price should be 600
Shutdown price is minimum AVC, minimum AVC is 400
So shutdown price is 400
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The graph contains the relevant cost curves for a perfectly (or purely) competitive firm. Move point...
The following graph shows the demand and cost curves for a perfectly competitive firm. The profit-maximizing...
The following graph shows the demand and cost curves for a perfectly competitive firm. The profit-maximizing firm will: MC ATC // AVC Multiple Choice shut down. ο produce with short-run losses. O produce with long-run economic profits. ο produce with short-run economic profits.
Classify each market characteristic as being a trait of competitive markets, monopolistically competitive markets, or both...
Classify each market characteristic as being a trait of competitive markets, monopolistically competitive markets, or both market structures. Competitive Markets Monopolistically Competitive Markets Both Market Structures Answer Bank Differentiated goods Few, if any, barriers to entry No one buyer or seller can control prices Many buyers and sellers Identical/homogenous goods Match each example to the market structure it is most likely to belong to. Perfect (pure) competition Monopolistic competition Oligopoly Monopoly Answer Bank Carl's Taco Truck, one of many food...
show all steps and formulas VC A product in a perfectly competitive market is $6. Assume...
show all steps and formulas
VC A product in a perfectly competitive market is $6. Assume the firm is subject to the following outputs and cost MR= TC MC= ATC Profit/Loss ATR/AQ ATR/AQ 200 250 12.5 -130 399 500 600 700 850 158 1000 191 1200 16 219 1700 7.76 II. Complete the table Plot the demand, MR, ATC and MC curves on a graph. Identify the profit maximizing output and price. Is this firm maximizing profits? Explain Can this...
For a perfectly competitive market made up of firms represented in the graph below, what is...
For a perfectly competitive market made up of firms represented in the graph below, what is the long run equilibrium price of the good? Cost ($) MC ATC AVC $16 $14 $12 $10 Quantity $14 $10 $12 $16 For a perfectly competitive market made up of firms represented in the graph below, if the price is $14, Cost ($) MC ATC $16 AVC - $14 $12 $10 Quantity The firm is operating at its minimum long run average total cost....
Sonya and Leah operate a small firm in a perfectly competitive market, the diagram illustrates its...
Sonya and Leah operate a small firm in a perfectly competitive
market, the diagram illustrates its MC, ATC, AVC and MR
curves.
1. What is their current average revenue per unit?
2. What is their profit maximizing level of output and
profit?
3. If the market clearing price drops to $10.00 per unit,
should they continue to produce in the short run if they wish to
maximize their economic profits (or minimize its economic losses)?
Explain.
4. What is their...
Use the following graph showing cost curves for a perfectly competitive firm to answer the next question. MC ATC /AVC C...
Use the following graph showing cost curves for a perfectly competitive firm to answer the next question. MC ATC /AVC Costs and Revenues 35 15 20 Quantity What is the lowest price at which the firm will start producing output in the short run? O $1.25 O $1.05 O $0.90 O
Label the graph for this perfectly (or purely) competitive cherry producer. Not all boxes will contain...
Label the graph for this perfectly (or purely) competitive cherry producer. Not all boxes will contain labels and not all labels will be used. ATC profits profits MC price minimum ATC Answer Bank Quantity losses Q at min ATC quantity produced
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions:...
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q + Q2 MC = 2 + 2Q At the level of output maximizing profit , the above firm's level of economic profit is A) $0 B) $4 C) $6 D) $8 *Additional information after I did the math: The price this firm charges for its product is $10, the level of output maximizing profit is 4...
3. The following graph shows the cost and revenue curves for a firm in a perfectly...
3. The following graph shows the cost and revenue curves for a firm in a perfectly competitive market. 90 80 D=MR 70 60 ATC Price and cost ($) 50 AVC 40 30 MC 20 10 0 10 20 30 40 50 60 70 80 90 a) Assume that new firms enter this market and that drives the price down to $35 per unit. Will the firm continue to produce or shut down? Explain your answer.
Figure 14-2 Suppose a firm operating in a competitive market has the following cost curves 1...
Figure 14-2 Suppose a firm operating in a competitive market has the following cost curves 1 Price MC ATC AVC Pd+--/.. Refer to Figure 14-2. If the market price is Pa, in the short run the firm will eam A.zero economic profits, B. negative economic profits and will shut down. C. negative economic profits but will try to remain open. Dpositive economic profits.
The following graph shows the demand and cost curves for a perfectly competitive firm. The profit-maximizing firm will: MC ATC // AVC Multiple Choice shut down. ο produce with short-run losses. O produce with long-run economic profits. ο produce with short-run economic profits.
Classify each market characteristic as being a trait of competitive markets, monopolistically competitive markets, or both market structures. Competitive Markets Monopolistically Competitive Markets Both Market Structures Answer Bank Differentiated goods Few, if any, barriers to entry No one buyer or seller can control prices Many buyers and sellers Identical/homogenous goods Match each example to the market structure it is most likely to belong to. Perfect (pure) competition Monopolistic competition Oligopoly Monopoly Answer Bank Carl's Taco Truck, one of many food...
show all steps and formulas
VC A product in a perfectly competitive market is $6. Assume the firm is subject to the following outputs and cost MR= TC MC= ATC Profit/Loss ATR/AQ ATR/AQ 200 250 12.5 -130 399 500 600 700 850 158 1000 191 1200 16 219 1700 7.76 II. Complete the table Plot the demand, MR, ATC and MC curves on a graph. Identify the profit maximizing output and price. Is this firm maximizing profits? Explain Can this...
For a perfectly competitive market made up of firms represented in the graph below, what is the long run equilibrium price of the good? Cost ($) MC ATC AVC $16 $14 $12 $10 Quantity $14 $10 $12 $16 For a perfectly competitive market made up of firms represented in the graph below, if the price is $14, Cost ($) MC ATC $16 AVC - $14 $12 $10 Quantity The firm is operating at its minimum long run average total cost....
Sonya and Leah operate a small firm in a perfectly competitive
market, the diagram illustrates its MC, ATC, AVC and MR
curves.
1. What is their current average revenue per unit?
2. What is their profit maximizing level of output and
profit?
3. If the market clearing price drops to $10.00 per unit,
should they continue to produce in the short run if they wish to
maximize their economic profits (or minimize its economic losses)?
Explain.
4. What is their...
Use the following graph showing cost curves for a perfectly competitive firm to answer the next question. MC ATC /AVC Costs and Revenues 35 15 20 Quantity What is the lowest price at which the firm will start producing output in the short run? O $1.25 O $1.05 O $0.90 O
Label the graph for this perfectly (or purely) competitive cherry producer. Not all boxes will contain labels and not all labels will be used. ATC profits profits MC price minimum ATC Answer Bank Quantity losses Q at min ATC quantity produced
3. The following graph shows the cost and revenue curves for a firm in a perfectly competitive market. 90 80 D=MR 70 60 ATC Price and cost ($) 50 AVC 40 30 MC 20 10 0 10 20 30 40 50 60 70 80 90 a) Assume that new firms enter this market and that drives the price down to $35 per unit. Will the firm continue to produce or shut down? Explain your answer.
Figure 14-2 Suppose a firm operating in a competitive market has the following cost curves 1 Price MC ATC AVC Pd+--/.. Refer to Figure 14-2. If the market price is Pa, in the short run the firm will eam A.zero economic profits, B. negative economic profits and will shut down. C. negative economic profits but will try to remain open. Dpositive economic profits.
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