2. Since a firm in a perfectly competitive market is a price taker, the demand for this firm's product is essentially a horizontal line. True O False
Q: 8. 4. A firm in a perfectly competitive market will operate in the short run as long as its price…
A: Variable cost is a cost varying in response to a change in output level. These costs are a function…
Q: 3. Explain under each of the situation, a firm working under a perfectly competitive market would…
A: In perfect competition, a firm maximizes profit where Marginal Revenue equals Marginal Cost, such…
Q: Question 42 If a perfectly competitive firm finds that price is less than average total cost, but…
A: Answer: If the price is less than the average total cost it means the firm is earning losses. But it…
Q: In a perfectly competitive market, which two conditions must be met to achieve long-run equilibrium?…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: 3. True or False? d. A firm that receives a price larger than its average variable costs but less…
A: In the short run, a firm may operate with excess profit, normal profit, and even incurring loss. But…
Q: Which of the following is ot a characteristic of a perfectly competitive market? no barriers to…
A: When talking about perfectly competitive market, it is the place with highest degree of competition…
Q: 1. What is the Total revenue generated by Blue INK at the profit maximizing level of output?[ Answer…
A:
Q: 5. Figure: A Perfectly Competitive Firm in the Short Run Price MC ATC G -MR AVC E N P W B D Quantity…
A: In perfectly competitive market, firms are price takers. Firms do not have any control over the…
Q: Q (in units). AFC (in dollars) AVC (in dollars) MC (in dollars) C 2.5 18 10 4 1.25 14 14 0.83 18 42…
A: In a perfect-completion there are large numbers of buyers(B) and sellers(S) dealing in…
Q: 1. Consider market adjustment from the short-run to the long-run under a perfectly competitive…
A: Since you posted multiple questions, we will provide you the answer of first question. If you want…
Q: QUESTION 16 %24 TC TR F E D B Output (Q) Refer to the provided graph for a purely competitive firm…
A: Break even point is the point where TR = TC and also after that point any increase in output level…
Q: Which of the following is true for a perfectly competitive firm? O The price of the product is equal…
A: Marginal revenue is the additional revenue earned with an additional unit of output sold.
Q: 1. Draw short-run firm and industry competitive equilibriums for a perfectly competitive…
A: A perfectly competitive market is where there are a lot of buyers and sellers. The industry’s…
Q: Q6: A company operating in a perfectly competitive market is faced with the following total costs:…
A: A perfectly competitive market structure is the market structure in which there are large number of…
Q: The graph below shows cost curves for a firm operating in a perfectly competitive market. Note: 20…
A: Answer- Need to find- The firm is earning Given in the question -
Q: 1.(a) Explain with the help of a graph how a perfectly competitive firm determines its profit-…
A: The perfectly competitive market would result in large number of buyers and sellers in the market.…
Q: Suppose the market for apples and the market for oranges are perfectly competitive. If consumers…
A: Under perfect competition, there exists a large number of buyers and sellers, each selling identical…
Q: QUESTION 7 Which of the following will not hold true for a competitive firm in long-run equilibrium?…
A: A perfectly competitive firm is one that is unable to generate an economic profit in the long-run…
Q: Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will…
A: In the perfectly competitive market, demand for a product from a specific firm is very elastic due…
Q: 2. Assume a competitive firm with a cost function c(y) = y? + f. Prove that producer's surplus…
A: A cost function is a formula used to predict the cost that will be experienced at a certain activity…
Q: 3. Explain why a perfectly competitive firm will shut down in the short run if price is lower than…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: A firm operating in a perfectly competitive market cannot increase its profit. Which of the…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: 26 - What is the maximum profit condition in a perfectly competitive market? a) TC<MR B)…
A: A perfectly competitive market is the one in which there are numerous sellers and buyers and no…
Q: The table shows the total cost for a firm in a perfectly competitive market where the market price…
A: A perfectly competitive firm is a price taker, charges the price equal to market equilibrium price
Q: 2. Show and explain the equilibrium in the short run for a perfectly competitive firm. Why…
A: Under perfect competition, there are a large number of firms who sell identical products. The…
Q: onsider the following cost information for a firm that operates in a perfectly competitive market.…
A: In perfectly competitive market, firms earn economic profits in the short run. With free entry and…
Q: 5. (a) What do we mean by “price taker”? Explain why a firm in perfect competition is a price taker.…
A: A perfectly competitive market is a market in which there are many buyers and sellers selling an…
Q: a. zero b. No answer text provided. c. negative d. positive
A: Eqm (Equilibrium) is the term in which mkt SS(supply) &DD( demand) intersects each other &…
Q: 12. In the short run if a perfectly competitive firm finds itself operating at a loss, it will A. O…
A: In the short run if a perfectly competitive firm finds itself operating at a loss, what it shows
Q: Refer to Figure #1. The short-run supply curve for a firm in a perfectly competitive market is O the…
A: The short run supply curve of a perfectly competitive firm is the firm's marginal cost on all points…
Q: The graph below shows cost curves for a firm operating in a perfectly competitive market. 20+ Note:…
A: Total cost is the sum of all costs incurred by the firm. Average total cost curve (ATC) is…
Q: (1) Consider the following cost schedule for a firm. Quantity Marginal Cost Average Total Cost…
A: The additional cost incurred by a producer when he/she increases the total output by one unit is…
Q: Which of the following is not a characteristic of a perfectly competitive market? O a large number…
A: A perfectly competitive firm has no power over the price as there are many firms with identical…
Q: 16. When a perfectly competitive firm finds that its market price is below its minitmum average…
A: The diagram below shows MC, AVC and ATC curves.
Q: Suppose a perfectly competitive firm is currently producing a quantity of output of 10 units. The…
A: Answer
Q: 3. Explain where a perfectly competitive firm's marginal revenue curve is located relative to price…
A: Perfect competition this is a type of a market structure.
Q: 10. In perfect competitive market, there is a firm with a U-shape marginal cost curve. The supply…
A: The supply curve for perfectly competitive firm starts with minimum point of Average variable…
Q: Consider a perfectly competitive market with identical firms. Each firm faces following average…
A: A perfectly competitive firm produces output where price is equal to marginal cost. It shuts down…
Q: $/4 MC 6.70 6.00 ATC 4.90 4.00 AVC d = MR 2.80 2.60 6 8 12 14 If the price-taker firm in Figure 9-16…
A: Marginal cost (MC): - it is the additional cost incurred due to the production of additional units…
Q: d. An individual firm in a perfectly competitive market must lower its price to sell more of its…
A: since you have asked multiple questions and according to our policy we can only solve the first…
Q: Explain the three possible profit maximizing positions of perfectly competitive firms in the…
A: Profit maximization is that the method by that a corporation determines the evaluation, input, and…
Q: 31.) Which curve represents the marginal cost of the firm? a.) A b.) В с.) С d.) None of the above…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Consider a perfectly competitive firm's average total cost curve, average variable cost curve, and…
A: In pefect competition firm in long term generally earn normal profit . In short run firm must…
Q: 3. Illustrate short run supply curve for a perfectly competitive firm and derive market supply…
A: In economics, the short run refers to the time horizon in which some inputs are variable while the…
Q: 1. Perfectly competitive market demand is given by P = 100 - Q and market supply is given by P = Q.…
A: In a perfectly competitive market structure, there exists a large number of buyers and sellers of…
Q: 20) What will a firm in a perfectly competitive industry do in the short-run if the price of its…
A: Short-run: - it is a short time period in which some factors of production are variable and some are…
Q: 3. Consider the perfectly competitive markets for bottled water in two cities, A and B. Both have a…
A: Perfect competition is a type of market structure where the number of sellers and buyers are working…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 2. Profit maximization of a seller in a competitive price-searchermarket Consider De Virtuose Cupcake, a cupcake shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. At the profit-maximizing output and price, the shop’s profit is equal to --- Given the profit-maximizing choice of output and price, there are -- shops in the industry than there wwould be in long run equilibrium. Please show me your work. Graph is attached as a picture. Thanks, NasimaDemand Schedule Assume MC = 0 Price Quantity $24 0 $22 1 $20 2 $18 3 $16 4 $14 5 $12 6 $10 7 $8 8 $6 9 $4 10 $2 11 $0 12 1. If the market is perfectly competitive, what will the market equilibrium price and quantity be in the long-term? Explain how you arrived at that answer. 2. If the market is a duopoly and the firms collude to maximize joint profits, what will market price and quantity be? Explain how you arrived at that answer. 3. If the market is a duopoly and the firms collude to maximize joint profits, what is each firm's total revenue if the firm split the market equally? Explain how you calculated that answer.2) Why is the demand curve facing a firm in an imperfectly competitive industry downward sloping? What are TWO marketing strategies available for a firm in this industry? Explain. Use graphs to explain your answer.
- 2. Now draw a firm operating under perfect competition that is losing money but should still stay open in the short run. (Again, show both the firm and the industry graphs)a. What happens over-time, if many firms are suffering economic losses?b. Is this good or bad for consumers? Explain.Question #5What is the MC=MR Profit Maximization point? What quantity should Delicious Deserts be producing at 'and' what price should they be charging to maximize their profits? Question #6 Why isn't it a good idea for them to produce and sell as many cakes as they can? Is it more profitable to sell less cakes at this current stage of their business? Question #7Do you have any other recommendations for Delicious Deserts to increase their revenues, profits, market share, and client retention?From the wines listed in Table 13.11, which are themost profitable and which are the least profitable?Why?
- Rebecca owns Louisiana Sugar Company, a manufacturer of sugar. Since there are lots of domestic manufacturers and importers of sugar and it is difficult to practice brand differentiation, the sugar industry is highly competitive. Suppose the demand for sugar increases. (1) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why. (2) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why.6. a..Illustrate the Perfectly Competitive Firms earning abnormal economic profit in the short run. b..Illustrate the Monopolistic Firms making a loss in the short but will continue to operate.1) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue: 2) A firm that is motivated by self interest should 3) If price is above the equilibrium level, competition among sellers to reduce the resulting 4) Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to 5) Since their introduction, prices of DVD players have fallen and the quantity purchased has increased. This statement 6) In a market economy the distribution of output will be determined primarily by 7) In a competitive market economy firms will select the least-cost production technique because 8) Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut…
- 1) Briefly explain how the total revenue for a profit-seeking film is determined 2)Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? 3)Contrast the rold of fixed costs and variable costs in economic decisions about future prodiction 4)Briefly compare and contrast the perceived demand curve for a monopolitically competitive firm and a perfectly competitive firm. 5)Briefly explain what quantity a profit maximizing monopolistic competitor will seek. Why not this type of competitive frim is productively efficient?(a) Why the competitive firm faces a relatively horizontal demand curve. (b) The profit maximization rule for a perfectly competitive firm states that the perfectly competitive firm will maximize its profits when it produces that quantity where marginal revenue equals marginal cost for the last unit produced and sold. In your own words explain why the firm is better off producing that quantity where MR = MC rather than that quantity where MR > MC or that quantity where MR < MC. (c) Should a firm shut down and why if its revenue is R=$ 1, 000. Its variable cost VC=$ 500 and its sunk fixed cost is F= $ 600. Its variable cost VC=$ 1, 500 and its sunk fixed cost is F= $ 500.4. Explain the significant difference of the product distributed by a perfect competition which is homogenous product and differentiated product for the monopolistic completion. Cite an example in your arguments.
