A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost but greater than the firm's average fixed cost. O a. True O b. False
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- Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?What price will a perfectly competitive firm end up charging up the long run? Why?If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
- If a profit-maximizing, competitive firm is producinga quantity at which marginal cost is between averagevariable cost and average total cost, it willa. keep producing in the short run but exit themarket in the long run.b. shut down in the short run but return toproduction in the long run.c. shut down in the short run and exit the market inthe long run.d. keep producing both in the short run and in thelong run.Q. In a perfectly competitive industry, a. Firms earn a breakeven profit in the short-run, but can either make an economic profit or make a loss in the long-run b. None of the above c. Firms can choose whether to produce or shut-down in the short-run d. Firms always charge a price equal to the minimum of AVC in the short-run e. There are high “sunk costs” involved which act as a barrier to entry in this industryThe cost data in the following table are for Marshall’s Meats, a perfectly competitive firm. Round your answers to 2 decimal places. Output Average Variable Cost AverageTotal Cost MarginalCost Total Cost 0 / / / $ 100 1 $ $ $ 130 2 150 3 180 4 220 5 270 6 330 7 440 a. Complete above the table. b. What is the break-even price? Break-even price: $ c. What is the shutdown price? Shutdown price: $ d. If the market price of the product is $50, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; (Click to select) Loss Profit : $ e. If the market price of the product is $110, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; (Click to select) profit loss : $
- Assume soybeans are produced by a perfectly competitive, constant cost industry. Fresh Fam is a typical frm producing soybeans and is cumently operating with an economic loss. a. Using a correctly labeled graph for Fresh Farm, show each of the following in the short run i The marginal cost curve and average total cost, labeled MC and ATC, respectively ii. Fresh Farm's price and loss-minimizing quantity, labeled P; and Q, respectively The average variable cost curve, labeled AVC b. Suppose that newspapers have recently reported that excessive soybean consumption can cause health problems. As a resut, wil the new loss-minimizing quanty for Fresh Fam be grester than less than, ar equa to Op in the short run? Explain. c. Is the long-run market supply for soybeans perfectly inelastic, relatively inelastic, unit elastic, relatively elastic, or perfecty elastic? d. Assume now that the soybean market is in a long-run equilibrium and that fertilizerS used in soybean production cause water…Assume soybeans are produced by a perfectly competitive, constant cost industry. Fresh Fam is a typical frm producing soybeans and is cumently operating with an economic loss. a. Using a correctly labeled graph for Fresh Farm, show each of the following in the short run i. The marginal cost curve and average total cost, labeled MC and ATC, respectively ii. Fresh Farm's price and loss-minimizing quantity, labeled P; and Q, respectively. iii. The average variable cost curve, labeled AVC b. Suppose that newspapers have recently reported that excessive soybean consumption can cause health problems. As a resut, wil the new loss-minimizing quanty for Fresh Fam be grester than less than, ar equa to Op in the short run? Explain. c. Is the long-run market supply for soybeans perfectly inelastic, relatively inelastic, unit elastic, relatively elastic, or perfecty elastic? d. Assume now that the soybean market is in a long-run equilibrium and that fertilizers used in soybean…The cost data in the following table are for Marshall’s Meats, a perfectly competitive firm. Round your answers to 2 decimal places. Output Average Variable Cost AverageTotal Cost MarginalCost Total Cost 0 / / / $ 95 1 $ $ $ 115 2 125 3 150 4 200 5 270 6 350 7 450 a. Complete above the table. b. What is the break-even price? Break-even price: $ c. What is the shutdown price? Shutdown price: $ d. If the market price of the product is $50, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; : $ e. If the market price of the product is $100, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; : $
- When can firms decide to shutdown the business? a. When average fixed cost is greater than total revenue b. When average variable cost is greater than the marginal revenue c. When the price does not cover average variable cost d. When marginal revenue is decreasing Firms experience a break even point when a. Total revenue is greater than total cost b. Marginal cost os equal to marginal revenue c. Average fixed cost is equal to average variable cost d. Marginal revenue is zeroste Paragraph Styles Editing A - ay - A Aa - A A poard Font Styles 2. A perfectly competitive firm has the following fixed and variable costs in th The market price for the firm's product is $150. Output FC VC TC TR Profit/Loss $100 $ 0 100 100 1 100 100 200 150 -50 2 100 180 280 300 20 3 100 300 400 450 50 4 100 440 540 600 60 5 100 600 700 750 50 6 100 780 880 900 20 a.Complete the table. b.At what output rate does the firm maximize profit or minimize loss? 4. c.What is the firm's marginal revenue at each positive level of output? Its average revenue?Question What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a C d Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should…
