1. If a profit-maximizing competitive firm has constant returns to scale, then its long-run profits must...
1. If a profit-maximizing competitive firm has constant returns to scale, then its long-run profits must be zero. True or False? Explain your answer.
2. A firm is producing output using one variable factor of production. The firm’s production function is y = 8x¹ˡ². The price of the output is $24 and the price of input is $8 per unit. How many units of the input should the firm use?
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1. If a profit-maximizing competitive firm has constant returns
to scale, then its long-run profits must...
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total...
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total cost is: TC = a + bQ2. Use only the cost curve given. Determine mathematically the level of output the firm will produce in the long run. Show mathematically if this amount differs from the amount of output the firm would produce in the short run. Explain why a perfectly competitive firm earns zero economic profit in the long run.
Question 2. Consider a perfectly competitive firm maximizing profits in the short run. It uses on...
Question 2. Consider a perfectly competitive firm maximizing profits in the short run. It uses only one variable input and the associated cost functions have the usual shape. The following information is given: (i.) the marginal product of labor is 10. (ii.) the firm is making zero profits. (ii.) the average total cost is 6. (iv.) the average product of labor is either 8 or 12. Use this information to answer the following questions. lustrate your answers with a diagram...
1. A competitive, profit-maximizing firm uses two inputs a and b. Its production function is F(a,...
1. A competitive, profit-maximizing firm uses two inputs a and b. Its production function is F(a, b) = a^1/2+b^1/2. Its output sells for $4 per unit. The price of input a is $1 per unit. The price of input b is $3 per unit. What is the profit maximizing amount for factor a? **(SOLVED, DO NOT ANSWER)**
Please answer both of the following questions. A perfectly competitive firm is maximizing profits in the...
Please answer both of the following questions.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which o can be positive, negative, or zero. O exist at the point at which price equals total cost. O must be positive. o must be either zero or positive. QUESTION 31 A constant-cost industry O has a horizontal long-run supply curve. O generates increasing profits whenever demand increases because...
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not...
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not likely earn an economic profit in the long run. shut down in the short run if price is less than average variable cost. all of the above. QUESTION 6 A monopolistic competitive firm is inefficient because the firm: earns positive economic profit in the long run. is producing at an output corresponding to the condition that marginal cost equals price. is not maximizing its...
Draw a diagram below that shows the short run profit maximizing output for a competitive firm...
Draw a diagram below that shows the short run profit maximizing output for a competitive firm at a market price of S10 producing an output of 20 that leads to a profit of $40. 4. 5. If SMC-20+2Q, AVC-1.5Q, P $100. a. Find Q b. This perfectly competitive firm will break-even if fixed cost equal how much?
True and False and Justify Because a monopolistically competitive firm has zero profits in the long...
True and False and Justify Because a monopolistically competitive firm has zero profits in the long run, it will have no market power and the Lerner index is zero. Advertising will make the demand function more elastic for a monopolistically competitive firm.
47. Why must profits be zero in long-run competitive equilibrium a. If profits are not zero,...
47. Why must profits be zero in long-run competitive equilibrium a. If profits are not zero, firms will produce higher-quality goods. b. If profits are not zero, marginal revenue will rise. c. If profits are not zero, marginal cost will rise. d. If profits are not zero, firms will enter or exit the industry. 48. Resource allocative efficiency occurs when a firm a. minimizes costs of production yet charges the highest possible price. b. produces the quantity of output at...
Which of the following is true of a profit-maximizing competitive firm in the short run? The...
Which of the following is true of a profit-maximizing competitive firm in the short run? The firm produces at the point where price is equal to marginal cost. The firm produces at the point where average cost is at its minimum point. The demand curve faced by each firm in the industry is downward sloping. The firm always makes a zero economic profit. The firm suffers a deadweight loss.
1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and...
1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and MC=5+2q. The market price is $35. a. What is the profit maximizing output level for each firm? b. What are the profits? c. Now, suppose that fixed costs were $250 instead of $50, so the firm faces the short run cost function TC=250+5q+q2. How does this change affect the firm’s output decision and profits? Should the firm continue to operate in the short run?
Question 2. Consider a perfectly competitive firm maximizing profits in the short run. It uses only one variable input and the associated cost functions have the usual shape. The following information is given: (i.) the marginal product of labor is 10. (ii.) the firm is making zero profits. (ii.) the average total cost is 6. (iv.) the average product of labor is either 8 or 12. Use this information to answer the following questions. lustrate your answers with a diagram...
Please answer both of the following questions.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which o can be positive, negative, or zero. O exist at the point at which price equals total cost. O must be positive. o must be either zero or positive. QUESTION 31 A constant-cost industry O has a horizontal long-run supply curve. O generates increasing profits whenever demand increases because...
Draw a diagram below that shows the short run profit maximizing output for a competitive firm at a market price of S10 producing an output of 20 that leads to a profit of $40. 4. 5. If SMC-20+2Q, AVC-1.5Q, P $100. a. Find Q b. This perfectly competitive firm will break-even if fixed cost equal how much?
47. Why must profits be zero in long-run competitive equilibrium a. If profits are not zero, firms will produce higher-quality goods. b. If profits are not zero, marginal revenue will rise. c. If profits are not zero, marginal cost will rise. d. If profits are not zero, firms will enter or exit the industry. 48. Resource allocative efficiency occurs when a firm a. minimizes costs of production yet charges the highest possible price. b. produces the quantity of output at...
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