Suppose that a firm sells its output in a perfectly competitive output market. If the price at which it sells its output increases, then its MRP curve will shift to the and its VMP curve will shift to the a. right; left. b. left; left. C. right; right. d. left; right.
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- Dr. D. is a critic of standard microeconomic analysis.In one of his frequent tirades, he was heard tosay, ‘‘Take the argument for upward-sloping,long-run supply curves. This is a circular argumentif I ever heard one. Long-run supply curves aresaid to be upward sloping because input pricesrise when firms hire more of them. And that occursbecause the long-run supply curves for theseinputs are upward sloping. Hence, the argumentboils down to ‘long-run supply curves are upwardsloping because other supply curves are upwardsloping.’ What nonsense!’’ Does Dr. D. have apoint? Explain clearly.Suppose the market for fresh pork is a competitive market. Initially, it is operatingat its long-run competitive equilibrium at a market price of $50.Owing to the spread of COVID-19, many people turn to buying frozen meat oncea week rather than fresh pork every day. As a result, the market price of fresh porkreduces to $30.a. With the aid of a pair of market-and-firm diagrams, illustrate how thiswould affect the equilibrium price and quantity in the fresh pork market andthe output of a typical butcher of fresh pork in the short-run.b. Suppose, for the situation in (a), the average cost of a typical butcher offresh pork is $40, which includes $15 on buying meat from suppliers, $12on paying rent, $8 on paying hourly wages on staff, and $5 on other costs.Explain whether a typical butcher should shut down in the short run.Gains from Trade - End of Chapter Problem Between 2016 and 2017, Nintendo produced 2.3 million NES Classic Edition mini consoles that sold out almost immediately as they arrived at stores. The retail price of the mini console was $59.99. However, if you were to check eBay at the time, you would see that people were buying the units for $250 each from scalpers. a. The price of $250 tells scalpers O they should continue to buy the console at the store and resell it on eBay for a higher price. they should keep the consoles they have already purchased and hang onto to them, as they will be considered antiques someday. they should no longer buy and resell the consoles because the price on eBay is too high to make a profit. b. Upon observing that the only way to obtain the gaming console is to buy it on eBay for $250, a consumer might do which of the following? Select all that apply. Consider buying another type of gaming console that is cheaper. Approach a family member about sharing the…
- 1. Which of the following remains constant as output increases? O a. TFC O b. TVC C. TC O d. All of the aboveA firm will most likely decide to decrease production, if its O A. MC>0. O B. MR> MC. O C. MRIf MR (marginal revenue) is less than MC (marginal cost), then the firm sould O a. decrease production O b. increase production O c. keep the production level constant O d. keep the prices constantMany businesses taco increasing marginal costs because___ O A. in order to increase output, you have to purchase more inputs.O B. a business may have to shift to more expensive sources of inputs in order to increase output.O C. most businesses are not near capacity.OD. when the price falls, output increases.5:23 The amount that a firm pays for all of the inputs that go into producing goods and services is the: O average cost. O total revenue. O total price. O total cost.Suppose that bicycles are produced by a perfectly competitive, constant-cost industryWhich of the following will have a larger effect the long-run price of bicycles: a government program to advertise the health benefits of bicyclingor (2) a government program increases the demand for steel, an input in the manufacture of bicycles that is produced in an increasing cost industry ? O. Option 1: shifts the demand curve out and increases the price. O. Option 2: shifts the supply curve up and increases the price O. Option 2: it shifts the demand curve up and increases the quantity. O. Option 2: shifts the supply curve up and increases the quantity.8. Suppose a firm is using two inputs, labor and capital. What will happen ifthe priçe óf (labor falls? priçe ofAnswer the next four questions after completing the cost table below: Quantity TC MC AFC AVC ATC 0 1 2 3 4 5 6 90 140 410 || X 70 X 45 22.5 What is the AVC when two units of output are produced? O a. $50 O b. $55 O c. $60 O d. $70 X 50 90 1 X 100 115Suppose Cindy's Glove Factory operates in a perfectly competitive market and is producing its profit- maximizing level of output. Suppose further that at this level of production its average total cost of producing mittens is $18, average variable cost is $16, and marginal cost is $14. Cindy should Select one: OA decrease production since it will increase her economic profit. O B. continue to produce since she is earning a positive economic profit. OC. increase production since it will increase her economic profit. O D. continue to produce since she is covering some of her fixed costs. O E. shut down immediately.SEE MORE QUESTIONS