PRICE (Dollars per medium box)245082018Demand161412100++01 2345678910QUANTITY OF OUTPUT (Thousands of medium boxes)In the following table, fill in the price and the total and marginal revenue Falero earns when it produces 0, 1, 2, or 3 boxes each day.Output(Boxes)PriceTotal Revenue(Dollars per box) (Dollars)0101102103100101010Marginal Revenue(Dollars)The demand curve that Falero faces is identical to which of its other curves? Check all that apply.Supply curveTotal revenue curveMarginal revenue curveMarginal cost curve 2. The demand curve facing a price-taking firmFalero is one of more than a hundred competitive price-taking firms in Miami that produce medium cardboard boxes for moving. The following graphshows the daily market demand and supply curves facing the medium cardboard box industry.PRICE (Dollars per medium box)4220Demand18Supply16141210001 2 3 4 5 6 7 8 9QUANTITY OF OUTPUT (Millions of medium boxes)10(?)On the following graph, use the green line (triangle symbol) to plot the demand curve for Falero's medium cardboard boxes. (Hint: Remember thatperfectly competitive firms must accept the given market price.)2018161412Demand(?)

Felero's Demand curve: Felero's demand curve will be a horizontal line on $10. The demand…

Answered: PRICE (Dollars per medium box) 2 4 50 8…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 9PA

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Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as the incumbent tries to bleak into the market by selling 4,000 units of output. Estimate from the graph what the new firms average cost of producing output would be. If the incumbent continues. to produce 6,000 units, how much output would the two films supply to the market? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn? Figure 9.2 Economics of Scale and Natural Monoploy
Productive efficiency and allocative efficiency are two concepts achieved in the long mm in a perfectly competitive market. These are the two reasons why we call them perfect. How would you use these two concepts to analyze other market structures and label them imperfect?
26.A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; marginal cost > marginal revenue E-Average total cost < price; marginal cost > marginal revenue 27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case? A-The market price was less than the firm's average variable cost. B-The firm was earning normal profits in the short run but projected economic losses in the long run. C-The firm's average total cost was higher than its average revenue. D-The market price was between the firm's average variable cost and average total cost. E-The…
4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 +1/2q^2Marginal cost: MC = q; where q is an individual firm’s quantity produced. The market demand curve for this product is Demand: Demand: QD = 120 − P, where P is the price and Q is the total quantity of the good in the market. Currently, there are 9firms in the market. In each following question, please explain how you find the answer!4.1 What is the equilibrium price and quantity for this market in the short run?
9.If a firm is maximizing its profit and is earning positive economic profit, which of the following must be true? Average total cost < price; marginal cost = marginal revenue Average total cost > price; marginal cost = marginal revenue Average total cost < average revenue; marginal cost > marginal revenue Total cost > total revenue; marginal cost > marginal revenue Total cost = total revenue; marginal cost > marginal revenue 12.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? Produce more milk Produce less milk Shut down in the short run Operate in the short run and leave the industry in the long run Insufficient information to determine
For a firm with market power, what is the marginal revenue gained when one more unit of output is sold? Question 19Answer a. The price at which the extra unit is sold plus the rise in revenue from selling other units at a higher price b. The price of the unit of output sold minus the production cost of that unit c. The price of the unit of output sold d. The price at which the extra unit is sold less the drop in revenue from selling other units at a lower price
Please answer only # 5 & 6. 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. Now suppose that the demand for sugar increases again, In order to protect the US sugar industry, the US government forbids the import of sugar into the United States (3) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why (4) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why. (5) Are the economic profits of…
2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…
M/c question - Micro 23) When a firm in a competitive market receives $5000 in total revenue, it has a marginal revenue of $100. What is the average revenue, and how many units were sold? A. $100 and 100 units B. $100 and 50 units C. $50 and 50 units D. $50 and 100 units 22) Scenario 14-1 Assume a certain firm is producing 1000 units of output (so Q = 1000). At Q = 1000, the firm’s marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. Refer to Scenario 14-1. At Q = 1000, what is the firm’s profit? A. $1000 B. -$200 C. $3000 D. $4000
1. In principle, how do we determine a perfectly competitive firm's profit-maximizing output and maximum profits given information about the market clearing price, and about the marginal cost and average total cost curves of the firm? Explain in words. 2. Can a firm make losses by producing the rate of output at which marginal revenue equals marginal cost? Why? 3. What determines the perfect competitor's supply curve? How is the industry supply curve found? 4. Why would it be economically inefficient for a firm to charge the price of a good greater than its marginal cost? 5. What is a price taker? Discuss the assumptions used to obtain the perfectly competitive model. 6. Why would economies of scale be a barrier to entry? 7. What is the main difference between the demand curves for the perfect competitor and the monopolist? 8. How does a monopoly maximize profits? What price does it charge? 9. Explain what will happen if firms in a monopolistically competitive industry are earning…

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