$5PMCATCP7010d = MR $5S2100Q4. The consumer's surplus in the above market is.D1,000QThe producer's surplus in the above market is5. If every firm has exactly the same cost curves as the firm on the left, then there would bein the market.firms6. If there is an increase in demand in the above market, will other firms eventually enter or exit themarket? Will this drive the market price up or down?

answer 4 Consumer surplus is the area of triangle PZY. Thus, consumer surplus = (1/2) * base *…

Answered: $5 P MC ATC P 70 10 d = MR $5 S 2 100 Q…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter22: Perfect Competition

Section22.1: The Theory Of Perfect Competition

Problem 4ST

See similar textbooks

Similar questions

Suppose the graph depicts the marginal cost (MC) curves of two profit maximizing Texas cotton farmers, Jesse and Neal. Assume Jesse and Neal sell their cotton in the same competitive market. What is the most efficient way for Jesse and Neal to produce a total of 1200 bales of cotton? Jesse's optimal output: Neal's optimal output: 400 Incorrect 200 Incurrect bales bales Price and cost $10- 9- 8- 7- 6- MC MC 0 100 200 300 400 500 600 700 800 900 1000 Bales of cotton
Consider the market for solar power. Assume the market is perfectly competitive and initially in long-run equilibrium; solar power sells for $.25 per kwh (kilowatt hour, a unit of power). Draw2graphs, oneto represent the market (supply and demand), and one to represent asingle firm (demand, marginal cost, and average cost curves). Assume a u-shaped average cost Show the equilibrium price and the quantity produced by the market (Q) and by each individual firm (q).
Suppose XYZ sells widgets in a competitive market. Suppose that, when the quantity of production is 10 units, XYZ's: • marginal profit is $3 • average variable cost is $9 • average total cost is $11 • average fixed cost is $2 • average revenue is $15 What is XYZ's marginal cost when the quantity of production is 10 units? tities
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 60
Suppose that each firm in a competitive industry has thefollowing costs: Total cost: TC=50 + 1/2q^2 Marginal cost: MC=q where q is an individual firm’s quantity produced. The marketdemand curve for this product is Demand: QD = 120 – P where P is the price and Q is the total quantity of the good.Currently, there are 9 firms in the market. a. What is each firm’s fixed cost? What is its variable cost?Give the equation for average total cost. b. Graph average total cost curve and the marginal cost curvefor q from 5 to 15. At what quantity is average total cost curve atits minimum? What us marginal cost and average total cost at thisquantity? c. Give the equation each firm’s supply curve. d. Give the equation for the market supply curve for the shortrun in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market inthe short run? f. In this equilibrium, how much does each firm produce?Calculate each firm’s profit or loss. Is there incentive for…
The graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Then, consider what would happen to the market if a third suppi enters the market, holding all else constant. Price per Stuffed Animal (5) 10 9 110 7 6 DA A m 2 Market for Stuffed Animals Firm Firm 2 Market 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 A third firm would mean O market supply increases. O higher prices of stuffed animals. market supply decreases. Firm 1 and Firm 2 would lower output to accommodate the new supplier in order to keep market supply constant.
Suppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 80 Profit or Loss 70 ATC 60 50 40 20 AVC 20 MC 10 10 12 QUANT TY Thousands of pans per dey 140 45 32 PRICE (Dollars per pan) 品导

ATC MC PA e AVC P3 P2 P1 8 10 11 12 Quantity (per day) The figure above shows a firm in a perfectly competitive market. If the industry price is between P2 and P3: Firm makes loss but produces because total revenue is greater than total variable cost. Firm makes loss but produces because total revenue is greater than total fixed cost. Firm makes profits because total revenue is greater than total cost. Firm shuts down production because loss from producing is greater than total fixed cost. Price and costs (dollars)
A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.
A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions are able to increase wages for workers?
Consider the market for tilapia. Ripple Rock Fish Farms, a small family fishery in Ohio, and The Fishin’ Company, a large corporate supplier, are both producers of tilapia. The marginal cost curves for both firms are shown in the accompanying graph. a. Suppose the market price of tilapia is $2.50 per pound. Move point A to Ripple Rock’s quantity sold. Move point B to The Fishin’ Company’s quantity sold. b. How many pounds of tilapia do they collectively supply?________thousand pounds c. To achieve efficient production, The Fishin’ Company should supply _____ ("more", or "less", or "the same") it is currently producing, and Ripple Rock should supply __________ ("more", or "less", or "the same") it is currently producing.
Chapter 16 Homework PRICE (Thousands of dollars per fire engine) 220 Femi 200 180 160 140 120 100 80 60 40 20 0 0 True 1 False 2 4 56 7 QUANTITY (Fire engines) 3 8 Demand 9 10 increase production from 8 to 9 fire engines because the True or False: If alternatively Femi's HookNLadder were a competitive firm and $80,000 were the market price for an engine, decreasing its price from $80,000 to $40,000 would result in the same change in the production quantity and, thus, total revenue. Revenue Lost Revenue Gained dominates in this scenario.

SEE MORE QUESTIONS

Recommended textbooks for you

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506893

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506893

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

Economics:

Economics

ISBN:

9781285859460

Author:

BOYES, William

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS