Question 12Examine the graph below. Assume this firm is producing at its profit-maximizing output. In the long run, if prices remain as shownhere, this firm willSAMCATC13121110AVC6603 8 0 12 15 18 21 qstay in the market and make a profithave zero economic profitO exit the marketshut down have losses equal to fixed costs9B7

The monopolist's profit-maximizing degree of output is found by comparing its marginal revenue with…

Examine the graph below. Assume this firm is producing at its profit-maximizing output. In the long run, if prices remain as shown here, this firm will AVC S . 12 15 16 21 q O stay in the market and make a profit have zero economic profit exit the market

Examine the graph below. Assume this firm is producing at its profit-maximizing output. In the long run, if prices remain as shown here, this firm will AVC S . 12 15 16 21 q O stay in the market and make a profit have zero economic profit exit the market

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 13P

See similar textbooks

Related questions

Q: Outpul Price | MPC | MEB /MSC / MSB / 20 64 64 100 80 1 10 bo 80 60 १० 2 3 80 160 60 96 80 64 64 92…

A: When firm produces goods it doesn't consider positive externalities into account. And when firm…

Q: Why does a firm in a competitive industry charge the market price? Group of answer choices If a…

A: Perfect competition is a market structure in which there are a great number of firms and buyers of…

Q: Assume that the uncovered interest parity (UIP) condition holds. Also assume that the US interest…

A: Uncovered Interest Parity:- According to the uncovered interest rate parity (UIP) hypothesis, the…

Q: The estimated capital investment and the annual expenses) for four alternative designs of a…

Q: Matthew's investment in her savings account matured to $5,892.79 at the e days. If the account was…

A: Given the information: Maturity amount = $5892.79Number of days = 80Convert the days into years =…

Q: uppose a consumer views two goods, X and Y, as perfect complements. Her utility function is given by…

A: The utility function in economics measures a consumer's welfare or satisfaction as a function of…

Q: Please post brief response to the following post: We know that from an organizational standpoint,…

A: Reengineering an association, otherwise called Business Process Reengineering, is the most common…

Q: If the firm is in the situation described in Q. 17 (i.e., continuing to operate in the short-run,…

A: 18. Here, it is given that a perfectly competitive firm is operating at a level where it incurs…

Q: A perfectly competitive firm charges a price that is O lower; more O lower; less O higher; more O…

A: In perfect competition there are larger number of firms and in monopoly there is a single firm.

Q: The demand function for a good is given by Q = 40 - 5P+4Y, where P is price and Y is income. The…

A: "In general, demand function reflects an inverse relationship between price and quantity demanded of…

Q: When the covid-19 shock started in early 2020, supermarkets quickly ran out of toilet paper as panic…

A: Introduction Even though the country is progressively reopening in the midst of the coronavirus…

Q: What is the difference between the Keynesian and rational expectation theories concerning the…

A: Fiscal policy and monetary coverage are called financial stabilization rules that regularly cross…

Q: please explain the balancing and reinforcing loops of the CLD

A: Commercial location development (CLD) is a strategy utilised by the government to position its area…

Q: What is the story for this question?

A: The effects of a shock involving a fall in money supply can be well explained using the IS-LM…

Q: Suppose you have the following model: -Bo+ B₂m₂ + B₂3 + B₂-2+U₂ where m (money supply) is exogenous,…

A: Answer -

Q: MM’s Proposition I holds, minimizing the weighted average cost of capital (WACC) is the same as…

A: The firm exists in the market to maximize the profit. The short run objectives might be different…

Q: In competitive markets, 3 .Group of answer choices 1. market forces of demand and supply determine…

A: A perfectly competitive firm is a price taker, which means the price is set by the market forces,…

Q: While firms in perfect competition maximize profit by producing at a quantity where the marginal…

A: Marginal revenue (MR) is the expansion in revenue that outcomes from the offer of one extra unit of…

Q: A manufacturer estimates marginal revenue to be 1 R'(q) = 100q 2 per unit when the level of…

A: Marginal profit is the profit change due to change in one or more units of production or we can say…

Q: 3. Price rises from $10 to $12, and the quantity demanded falls from 200 units to 180 units. What is…

A: Given: The price level for a good rises from = $10 to $12 The quantity demanded falls from 200 units…

Q: Please define the following terms in your own words and no plagiarism: Board of Governors, Federal…

A: Define the following terms, Board of Governors, Federal Open Market Committee (FOMC), Federal…

Q: What trade has changed? Does the U.S. still maintain the world's dominant power? Why has the world…

A: Global exchange is the trading of capital, products, and administrations across worldwide lines or…

Q: make an item in-house, equipment costing $250,000 must be purchased. It will have a life of 4 years,…

A: Breakeven point is that point where there is no profit no loss or revenue is equivalent to expenses.…

Q: Refer to Figure 5-1 The firm will earn positive economic profits if the price is P4 only P4 or P3…

A: In perfect competition, eqm Q(quantity) is found by the intersection of MC(marginal cost) and…

Q: A. Articulate a defensible claim or thesis that responds to the prompt and establishes a line of…

A: Measures taken by the government to alter market conditions are referred to as fiscal policy…

Q: The derivative based strategy known as portfolio insurance involves a. the sale of a put option on…

A: When talking about derivatives, it can be said that these are the ways to make a contract at the…

Q: What is the Operations of Alibaba Group: The Rise of a Platform Giant?

A: Alibaba Group Holding Ltd. (BABA) is a Cayman Islands-based holding company that operates its…

Q: Two street vendors (Vendor Y and Vendor Z) with mobile carts produce the same good which they sell…

A: Equilibrium is a state in a market-based economy in which economic powers - like supply and demand

Q: uestion 23 The deadweight loss that arises from a monopoly is a consequence of the fact that the…

A: When the socially ideal amount of an item or service is not produced, deadweight loss, also called…

Q: Question 13 If a firm operating in a competitive industry shuts down in the short run, it can avoid…

A: The structure of a market where there are numerous firms competing with each other for selling goods…

Q: Question Two Explain the concept of the Expected Utility Hypothesis (EUH) and state all relevant…

A: When there is uncertainty about the result, this theory estimates the likely utility of an action.…

Q: With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50.…

A: Given: Total Fixed Cost = 400. Average Total Cost = $3 Average Variable Cost = $2.50

Q: Espinoza has $1,000 in cash, he deposits the total amount in Legion Banc. How much can LegionBanc…

A: In the banking sector, when an individual deposited his money, the proportion of this money is used…

Q: Why employment in the economic sector has declined?

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: Could you explain more on how could it provide a better protection on the interest of individual's…

A: A Deed of Mutual Covenant and Management Agreement in short is DMC that controls the rights and…

Q: The economy of Kiwiland can be characterized by Equation below C=1,000+ 0.5Yd T=200 G=400 I=500…

A: The information which has been given to us is as follows:-C= 1000+0.5D T=200 G=400 I=500

Q: Consider the market for a good shown in the graph below. If the price of the good is set at $2,…

A: Equilibrium is achieved where demand intersects the supply

Q: Circular Flow Chart Quiz Fill in the 6 BLANK spots using the following 5 options: Product Markets…

A: The circular flow model demonstrates how money moves through an economy. It shows the basic economic…

Q: In considering the merits of lengthening the duration of unemployment benefits one should consider?…

A: Unemployment benefit programmes exist in every industrialized economy to safeguard employees from…

Q: A certain project has the following cash flow:

A: Given, MARR : 15%

Q: Question 9 Refer to Table 5-1 and the firm in Question 8. At which quantity will the firm choose to…

A: Perfectly competitive market is that market which have following characteristics large numbers of…

Q: 1) How much output should the firm produce? ii) At what price should the firm produce III) What is…

A: It is generally accepted that the primary objective of a normal company is to achieve the highest…

Q: The slope of the utility curves for a strongly risk averse investor, relative to the slope the…

A: When talking about the relationship between risk and utility, the curve is generally upward sloping…

Q: Describe the arguments for and against society responsibility

A: Society Responsibility or social responsibility refers to the rationality of any individual or…

Q: 13 Using the demand and supply curves for bonds, explain the effect of the following on the…

A: All other things being equal, the bond demand curve is the connection between the price and the…

Q: Which of the following is true?* Donations to any person is exempt if the amount of donation…

A: Donations are a sort of charity that is given by an individual to some other person or an…

Q: Assume that all the money is held as a deposit while banks keep 10% of the deposit as a reserve.…

A: Answer is given below

Q: Explain what non-economic (or non-market or non-capitalist) values are involved in your example and…

A: Economic pursuit is a person who acts in nature to improve the quality of life and increase work…

Q: Q1. Macroeconomics is an aggregate of what happens at the microeconomic level. Would it be possible…

A: Macroeconomics is the part of financial aspects that arrangements with the design, execution,…

Q: If non-chequable savings accounts are equal to R216 600, M1A equals R560 000, cheques, transmission…

A: The money market deposit account can be calculated by calculating the value of the M2 measure of…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
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?
How does the average variable cost curve help a firm know whether it should shut down immediately?
What is a price taker firm?
What two lines on a cost curve diagram intersect at the zero-profit point?
If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
Why will profits for films in a perfectly competitive industry tend to vanish in the long run?
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?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.