Q: Small “Mom and Pop" firms sometimes exist even though they do not earn economic profits. How can you…
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A: Answer
Q: What type of economic profit can most firms expect to make in the long run? Explain your answer.
A: A market is a place where buying and selling of goods and services takes place.
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Q: Do entry and exit occur in the short run, the long run, both, or neither?
A: In the short run, the firms have one or more fixed factors of production. The firms cannot change…
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A: The costs of production include both the fixed costs as well as the variable costs. The fixed costs…
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A:
Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?
A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…
Q: What is the difference between Economic Profit and Accounting profit?
A: Explicit Cost is the cost paid to factors of production that are hired from outsiders. Implicit Cost…
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Q: Marginal revenue must exceed marginal cost.Explain why?
A: Total revenue is the total receipts collected from the sale of goods or services in the market. The…
Q: How do you define 'profit
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Q: A firm under perfect competition is
A: To find : What is firm under perfect competition.
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A: As a manager ,the primary responsibility is to look in the profits of the business. Business can be…
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A: Given: Price = $20, Quantity = 400 units, Unit cost = $15, Implicit costs $ = 4,000 To find: econom
Q: When will a business shut-down in the short-run?
A: Short-run: - it is a short time period in which some factors of production are variable and some are…
Q: What is Economic profit
A: Economic profit refers to the profit that obtained by deducting the implicit cost or opportunity…
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A: Perfect competition is a market structure which leads to the Pareto-efficient allocation of…
Q: Why does exit occur?
A: When the firms earn less than their total cost of production, they make loss. If existing firms in…
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Q: Can you explain what is Perfect Competition and how does Perfect competition work?
A: Market structure refers to the place where the transaction of goods and services takes place between…
Q: In order to maximize the profit, what decision do you think is the most important one?
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Which 'Economies of Scale' creates imperfect competition and Why?
A: Economies of scale refers to a situation where there is fall in per unit output of average cost with…
Q: In perfect competition, if the marginal cost increases which way does the curve shift? what are some…
A: Perfect competition is one of the market structures out of 4 types of market structures in an…
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A: Filling for bankruptcy does not mean that the firms have to shut down. In the US the bankruptcy laws…
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A: Maximization of profits occur at the point where the marginal revenue and marginal cost are equal.
Q: Can you give examples of companies with perfect competition?
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Q: What is the difference between economic profit and accounting profit?
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: Discuss where does the shutdown being and why? What does the company has to do to get back to…
A: The answer is given below
Q: Explain profit ?
A: The average sales price multiplied by the number of units sold equals revenue. Net income is…
Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?
A: Answer - In the long run where the every input can vary and as in the long run where firms can make…
Q: What is the meaning of economic profit. Support your answer by example?
A: There are two types of profit: Economic Profit Accounting Profit The economic profit can be…
Q: What is the shutdown decision of the firm? How should a firm decide whether to continue business or…
A: For a perfectly competitive company, where the total revenue of the company, i.e. the product of its…
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- According to the accompanying table, what quantity of output should the firm produce? Explain your answer.A perfectly competitive firm is currently maximizing profits. The market for its product is in a long-run equilibrium. Market demand for the product decreases. Briefly explain what happens in the market by describing what will happen to this firm’s production (and most importantly why) as a result of that change. Describe what will happen and why to the firm’s costs and profits as the firm makes its choices. Emphasize why each type of individual cost does or does not change as the firm changes its level of production.Please answer all parts: How does fixed cost affect marginal cost? Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer. Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly.
- he following graph summarizes the demand and costs for a firm that operates in a perfectly competitive market. What level of output should this firm produce in the short run? What price should this firm charge in the short run? What is the firm’s total cost at this level of output? What is the firm’s total variable cost at this level of output? What is the firm’s fixed cost at this level of output? What is the firm’s profit if it produces this level of output? What is the firm’s profit if it shuts down? In the long run, should this firm continue to operate or shut down? problem 1-6 are solved, this is subparts.Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer. Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly.Now suppose that an FDA report announces that coffee is harmful to cardiovascular health. Starting from the diagrams show and discuss with your group how the market will adjust towards a short-run equilibrium and then return to a long-run equilibrium. What happen to the market price and quantity in the short-run? What happens to individual firm output and the number of firms in the short-run? What is the profit in the short-run? What happen to the market price and quantity in the long-run? What happens to individual firm output and the number of firms in the long-run? What is the profit in the long-run? (in reference to: https://www.bartleby.com/questions-and-answers/market-for-coffee-shop-coffee-sarbucks-store-market-for-coffee-shop-coffee-sarbucks-store/0b934604-546c-4b2a-ae02-e65f6f9c2eb2 and https://www.bartleby.com/questions-and-answers/o-baby-fifty-quit-or-x-dessie-summ-g-love-island-season-m-gmail-email-from-h-m-inbox-96-o_folor-x-o-/fb1f7acb-7bb6-46ad-85e6-72aa635db643
- Suppose Sophia sells flowers in a perfectly competitive market and always maximizes profit. (a) Given the current market price is $5, Sophia sells 2000 flowers every week and makes zero profit. What are the amounts of marginal revenue, marginal cost and average total cost at this level of output? Briefly explain. (b) Continued from (a), if the market demand decreases, what will be the short-run impact on Sophia’s profit? Explain in detail with diagrams.The following graph shows the demand curve, as well as the AVC, ATC and MC curves of a company selling rolled oats in a perfectly competitive market. Use the graph to answer the questions. The goal of the company is to maximize its profit. How many boxes of rolled oats should it sell to attain this goal? What price will it charge? How much profit does this firm make per month? Will this company produce or shut down in the short run? Why? Will this firm exit the market for rolled oats in the long run or not? Why?Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 150 million pounds per year. Suppose the Surgeon General issues a report saying that eating shrimp is bad for your health. The Surgeon General’s report will cause consumers to demand shrimp at every price. In the short run, firms will respond by . Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the Surgeon General’s report. In the long run, some firms will respond by until . Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the Surgeon General’s report and the new long-run equilibrium after firms and consumers finish adjusting to the news. The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run.
- Suppose a firm in a perfectly competitive industry develops a manufacturing innovation that lower its variable cost of production. What are the short run impacts of this innovation on both the firm and the industry? Please include a graph to illustrate the short run impacts. What are the long run impacts on both the firm and industry? Please include a graph to illustrate the long run impacts.The table shows some cost data for Frank's Fortune Cookies which operates in a perfectly competitive market. At a market price of $42.83 a batch, what quantity does Frank's produce and what is the firm's economic profit in the short run? When the market price is $42.83 a batch, Frank produces batches of cookies. When Frank produces 6 batches of cookies, Frank's economic profit is $ Total Average Average product (batches fixed cost variable Average cost total cost Marginal cost per day) (dollars per batch) 1 77.00 45.00 122.00 31.00 2 38.50 38.00 76.50 23.01 3 25.67 33.00 58.67 20.99 4 19.25 30.00 49.25 26.00 5 15.40 29.20 44.60 33.98 6 12.83 30.00 42.83 51.02 7 11.00 33.00 44.00 77.04 8 9.63 38.50 48.13(1) Use the graph to answer the question below. The quantity is measured in thousands of units. What will this firm decide to do in the long run? A-It will stay in the market because the price is above its AVC at its profit-maximizing output. B-It will leave the market because the price is below its ATC at its profit-maximizing output. C-It will increase its price to point B to earn normal profit. D-It will increase its output until its profit-maximizing output level is equal to B. E-Insufficient data to determine. (2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do? A-Produce more milk. B-Produce less milk. C-Shut down in the short run. D-Operate in the short run and leave the industry in the long run. E-Insufficient information to determine (3) A firm operating in a perfectly competitive market cannot…