The graph below gives marginal costs (MC), average variable costs (AVC), and average total costs ATC) for a firm. Note that marginal revenue (MR) is not shown. Suppose the firm operates in a perfectly competitive market and acts to maximize its profit. which of the following is/are true? |. At a price of 1.5, the firm will shut down in the short-run. II. At a price of 0.5, the firm will shut down in the short-run. III. At a price of 2.5, the firm will make a positive economic profit.
Q: If you know that the market price for a perfectly competitive firm is 10 Dirhams and the average…
A: In the perfectly competitive market structure there exists a large number of buyers and sellers of…
Q: A perfectly competitive firm has the following total cost function: Total output Total Cost 0…
A: Profit is maximized when Price = MC, where MC = Change in TC / Change in Q When Q = 4, MC = (69 -…
Q: Rose growing is perfectly competitive and all growers have the same costs. The market price is $16 a…
A: Given, Market price for rose (MP) = $16/bunch Quantity at maximum profit (Q) = 1,100…
Q: MC Price ATC AVC 10 15 Quantity
A: Shut down point is the point where a firm is unable to recover its variable costs in the short run.…
Q: Suppose the price determined by the market is 1.5. Assume a perfectly competitive industry. Show all…
A: The firm would minimize the loss or maximize the profit at the output level where marginal revenue…
Q: The market for fertilizer is perfectly competitive. Firms in the market are producing output but are…
A: Perfect competition: The market in which competition is at its greatest possible level.
Q: In a short-run perfectly competitive market of tomatoes, when P=$9, firm X produces 0 and firm Y…
A: Perfect competition is the market condition where there are large number if buyer and seller are…
Q: which shows the graph of a perfectly competitive firm in the short run. a) If the firm's demand…
A: Perfect competition is a business system where a homogeneous commodity is sold by several companies.…
Q: A perfectly competitive firm's short run profit function is: n(q) = 80q - (110 + 40q + 10q?) %3D…
A: Profit function: π = 80q - (110 + 40q + 10q2) Where TR = 80q TC = 110 + 40q + 10q2 ------------ TVC…
Q: A perfectly competitive firm currently sells each unit of output at $3 and faces an average total…
A: In a market, a perfectly competitive firm is one that has to accept the market price and sell all…
Q: The graph shows the average total cost (ATC) curve, the marginal cost (MC) curve, the average…
A: 1)MR=MC at a market price of $$200 and 260TR=Price×QuantityTR=200×260TR=$52,000
Q: 1. For an individual firm in a perfectly competitive market, the cost function is c(y) = 8y2 + 5y +…
A: Cost function(TC) = 8y2+5y+6 In perfect competition , P= MC = MR=AR 1) MC = d(TC)/dy = 16y+5 (MC in…
Q: Consider the following cost curve for a firm in a competitive industry where the market price equals…
A: The rise or decrease in the cost of producing one more item or serving one more client is referred…
Q: The following table shows the cost of production for a perfectly competitive firm. If the market…
A: In perfect competition there are many firms producing identical goods
Q: Canadian red wheat is a normal good, in a perfectly competitive market that is in long-run…
A: Perfectly competitive market is characterized by a large number of buyers and sellers who deals in…
Q: Consider the following cost curve for a firm in a competitive industry where the market price equals…
A:
Q: The table below gives the short run total cost function for a typical firm in a perfectly…
A: Market power is a measure of the ability of a company to successfully influence the pricing of its…
Q: The Emerald Company, a firm in the perfectly competitive custom jewelry industry, asks you for your…
A: First, we will find all the costs from the given information. Quantity is 550 units Total Revenue is…
Q: Can an industry characterized by globally increasing returns to scale be perfectly competitive in…
A: 3.1Long-run equilibrium in a scenario of a perfectly competitive industry is said to have occurred…
Q: Under what condition will a competitive firm necessarly shut down its operations? What does this…
A: Meaning of Short-Run Supply Curve and Law of Supply: In short-run supply curve, the supply of…
Q: 1. For an individual firm in a perfectly competitive market, the cost function is c(y) = 8y2 + 5y +…
A: a) In a perfectly competitive market, At equilibrium MC = P = AR= MR Cost function (TC) = 8y2 + 5y +…
Q: Refer to the table to the right which shows the short - run cost data of a perfectly competitive…
A: The total cost incurred by a firm operating in a market includes fixed costs and variable costs.…
Q: The attached figure shows the short-run cost curves for a perfectly competitive firm. If the price…
A: In the perfectly competitive market structure there exists a large number of buyers and sellers of…
Q: PROBLEM #1 The cost function for a typical firm, competing in a perfectly competitive market, is as…
A: Average variable cost (AVC) = Average total cost (ATC) / quantity (q) Marginal cost (MC) =…
Q: The graph depicts the average total cost curve for a perfectly competitive firm. At the long-run…
A: In a perfectly competitive market, price is constant at all levels of output so it is equal to…
Q: 1. Consider a perfectly competitive market with a price of $12, where each firm has a cost function…
A: Part (a) Given = P = 12 Equilibrium in perfect competition is given when P = MC. C(q) = 50 + 2 q +…
Q: Suppose you start a business of manufacturing computer software. Assume that this computer software…
A: In the short-run, a business unit assesses its total revenue against total variable cost due to sunk…
Q: 4. The cost function for a firm facing perfect competition is C(q)=1000+25q-0.5q²+0.01q^3 What is…
A:
Q: Which of the following is true of perfectly competitive firm that keeps producing in the short run?…
A: A perfectly competitive market is characterized by a large number of buyers and sellers. The price…
Q: Consider a firm that has no fixed costs and that is currently losing money. Are there any situations…
A: If a firm has no fixed cost, the total cost of a firm is equal to the total variable cost, and…
Q: A perfectly competitive firm is producing at the point where its marginal cost equals the price of…
A: We are going to use profit maximisation structure of a perfectly competitive firm
Q: Time remaining: 00 :07 :05 Economics Assume that the market for Wheat is perfectly competitive in a…
A: Given the ATC = ATC(Q) = 1000/Q + 200 − 10Q + Q^2 / 3 MC(Q) = 200 − 20Q + Q^2 AVC(Q) = 200 − 10Q +…
Q: the short run, a firm that finds itself earning a loss should compare the market price to which cost…
A: Fixed cost is independent of output produced whereas variable cost varies with the level of…
Q: Total Cost and Output, which describes Sergei's total costs for his perfectly competitive…
A: A perfectly competitive firm is a price taker as it accepts the market price as given.
Q: Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost…
A: Answer: A perfectly competitive firm maximizes its profit where the average total cost (ATC) is…
Q: Refer to the above graph for a purely competitive firm in the short run. What minimum output level…
A: In order to answer this question, it is imperative to understand the concepts of breakeven and…
Q: The table below shows the short-run production function for Josh's Consulting Firm. Number of…
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: Marvin’s Milk Farm produces milk and sells it in a perfectly competitive market at $4 per bottle.…
A: In order to calculate the combination of the labor and capital that produces 100 bottles of milk per…
Q: A firm in a perfectly competitive industry knows the following about its costs and revenue. The firm…
A: In perfectly competitive market price is constant so it is equal to marginal revenue. At profit…
Q: T(q) = R(q) – C(q) = 40q – (35 + 20q + 10q). What is the positive output level that maximizes the…
A: A firm earns maximum profit by producing output at a level where marginal revenue is equal to…
Q: What relationship determines whether or not a firm should stay open in the short run? A) The price…
A: Total cost is the total expenditure incurred by the firm on the production of final goods and…
Q: If marginal revenue is less than marginal cost for a perfectly competitive firm , it should a)…
A: Marginal revenue is the amount of Revenue one could gain from selling one additional unit. Marginal…
Q: Suppose you start a business of manufacturing computer software. Assume that this computer software…
A: Given the fixed cost per month = 80,000 Total cost = 140000 Quantity of software = 1000 Average…
Q: In the above figure, The cost curves of a typical perfectly competitive curve are show. What will…
A: In a competitive firm due to free entry and exit the firm earns normal profit in the long run.
Q: C. Table below shows some cost data for a perfectly competitive firm i. Is the firm operating in…
A: The perfect competition is a type of market which is characterized by a large number of buyers and…
Q: (Figure: Demand and Average Cost Curves) Which of the following diagrams represents the demand and…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The wheat industry is comprised of many firms producing an identical product. Market demand and supply conditions are indicated in the left-hand panel of the figure attached; the long-run cost curves of a wheat farmer are shown in the right-hand panel. Currently, the market price for wheat is $2 per pound, and at that price, consumers are purchasing 800,000 pounds of wheat per day. Using the graphs attached, answer the following: a. How many pounds of wheat will each farmer produce if they want to maximize profits? b. How many farmers are currently serving the industry (fractional numbers are fine)? c. In the long run, what will the equilibrium price of wheat be? Briefly explain your answer.QUESTION 10 Jack sells water bottles. Assume the market for water bottles is perfectly competitive. Jack sells his water bottles at the market price of $9.00. At the profit-maximising output level of 51 water bottles, Jack's average total cost is $4.40 per water bottle. The minimum average variable cost is $3.90 per water bottle. Answer the following questions: a. Jack's economic profit or loss is decimal places (ie: to the nearest cent). (use a negative value if a loss). Answer in dollars, rounded to two b. State whether the following statement is true or false: "At the profit-maximising quantity, Jack is making an economic profit of $4.60 per water bottle." Type T for true, or F for false c. State whether the following statement is true or false: "Jack should shut down if the market price is $3.85 per water bottle." Type T for true, or F for falseSuppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 −PThere are 9 firms in the market.a) What are each firm’s: fixed cost, variable cost, marginal cost, and average total cost? Graph the average-total-cost curve and the marginal-cost curve.b) Give the equation for each firm’s supply curve.the average-total-cost curve at its minimum? What is marginal cost and average totalc) Give the equation for the market supply curve for the short run in which the numbercost at that quantity?
- The graph shows the average total cost (ATC) curve, the marginal cost (MC) curve, the average variable cost (AVC) curve, and the marginal revenue (MR) curve (which is also the market price) for a perfectly competitive firm that produces terrible towels. Answer the three accompanying questions, assuming that the firm is profit-maximizing and does not shut down in the short run. What is the firm's total revenue? Price $485 $450 $300 $225 205 260 Quantity 336 365 MC ATC AVC MR PThe graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5Suppose that a perfectly competitive firm's marginal revenue equals $12 when it sells 10 units of output. If the marginal cost of producing the 10th unit is $14, to maximize its profit the firm should A) decrease its production. B) shut down. C) increase its production. D) increase the price it charges for its product. E) do nothing because it is already maximizing its profit.
- Suppose that each firm in a competitive industry has the following costs: where q is an individual firm’s quantity produced. The market demand curve for this product is where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. What is each firm’s fixed cost? What is its variable cost? Give the equation for average total cost. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? Give the equation for each firm’s supply curve. Give the equation for the market supply curve for the short run in which the number of firms is fixed. What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm’s profit or loss. Is there incentive for firms to enter or exit? In the long run with…Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?Q3: a. If a competitive firm is making loss in the short run, and it is selling a (100) units of a good at S.R(9). To be known that the AVC is S.R(10). What should the firm decide? If the quantity produced changed from 1 to 2, the total cost changed from 64 to 80 and the price is 40. b. What is the total revenue? c. What is the marginal cost?
- A perfectly competitive firm faces the short-run cost schedule shown in Table 1. Output 1 4 8 Total Cost 12 20 26 32 40 52 68 93 122 Table 1 A) Calculate average total cost (ATC=TC/Q), marginal cost (MC=ATC/AQ) and marginal revenue (MR=ATRIAQ) for each level of output. The price per unit of output is £16. B) Plot ATC, MC and MR on a graph and mark the profit-maximising output. At what output is profit maximised? C) How much profit/loss is made at the optimum level of output? D) Assume market price declines to £9 per unit. If the firm's average variable cost is £9.5, should the firm shut down in the short run? In the long run? Explain. E) If the firm is typical of other firms, what price will it charge in the long run? Explain.A perfectly competitive firm faces the short-run cost schedule shown in Table (a)Calculate average total cost (ATC=TC/Q), marginal cost (MC=ATC/AQ) and marginal revenue (MR-ATR/AQ) for each level of output. The price per unit of output is £16 b) Plot ATC, MC and MR on a graph and mark the profit-maximising output. At what output is profit maximised? c) How much profit/loss is made at the optimum level of output? Assume market price declines to £9 per unit. If the firm's average variable cost is £9.5, should the firm shut down in the short run? In the long run? Explain. If the firm is typical of other firms, what price will it charge in the long run? Explain.A firm in a perfectly competitive industry knows the following about its costs and revenue. The firm would like to maximize profit and has hired a consultant for advice. Price Q of Output Total Revenue Total Cost Total Fixed Cost 10 500 TR? 9,400 TFC ? Total Variable Cost Average Total Cost Average Variable Cost MC 6,500 is at minimum level AVC? MC? Total Revenue Number Total Fixed Cost Number Average Variable Cost Number Marginal Cost Number What is the value of the profit or loss (-) at the current output ( include the - sign if it's a loss) Number Consultant's Advice: As a consultant, what advice would you give to this firm:(Choose ONE answer from the following) Number 1. Firm should do nothing; it is already profit maximizing/loss minimizing 2. Firm should reduce quantity of output 3. Firm should increase quantity of output 4. Firm should shutdown operations 5. The given number set is inconsistent