2.) Use the point drawing tool to draw the long-run equilibrium. Label the point "E." Carefully follow the instructions above, and only draw the required objects. b. Draw a diagram for a typical firm when the industry is in its initial long-run equilibrium, showing its MC, ATC, and LRAC curves. Use the three-point drawing tool to plot the MC, ATC, and LRAC curves. Properly label the curves. Carefully follow the instructions above, and only draw the required objects.

2.) Use the point drawing tool to draw the long-run equilibrium. Label the point "E." Carefully follow the instructions above, and only draw the required objects. b. Draw a diagram for a typical firm when the industry is in its initial long-run equilibrium, showing its MC, ATC, and LRAC curves. Use the three-point drawing tool to plot the MC, ATC, and LRAC curves. Properly label the curves. Carefully follow the instructions above, and only draw the required objects.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 5PA

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Similar questions

4 (Kindly see attached screenshot) The firm depicted in Figure 6-10 currently is producing 200 units of output per day. If it decides to increase its output level to 375 units, then it will a. adjust from point F to point G in the short run b. be unable to adjust to point G in the short run because some inputs are fixed c. be unable to adjust to point G in the long run because some are fixed d. be unable to adjust to point H in the short run because some inputs are fixed e. adjust from point F to point H in the long run Please be as detailed as possible in your answer.
. 1. What area represents the firm's profit? 2.At which output level are economies of scale exhausted? 3.Does this graph most likely represent the long run or the short run? Why?
Do entry and exit occur in the short run, the long run, both, or neither?
Would independent trucking fit the characteristics of a perfectly competitive industry?
3. If a firm had decreasing returns to scale at all levels of output and it divided up into two equal-size smaller firms, what would happen to its overall profits?
4. The firm depicted in Figure 6-10 currently is producing 200 units of output per day. If it decides to increase its output level to 375 units, then it will (Please give as much detail as possible with graphs, algebra, and numbers to explain.) a. adjust from point F to point G in the short run b. be unable to adjust to point G in the short run because some inputs are fixed c. be unable to adjust to point G in the long run because some are fixed d. be unable to adjust to point H in the short run because some inputs are fixed e. adjust from point F to point H in the long run
19.What is meant by zero economic profit? If a firm earns zero economic profit in long run does it violate the profit maximizing behaviour of a firm in long run as if there is no profit then there is no point of production?
5. Use the graph to answer the question Between points C and D, the long-run average total cost curve is characterized by ________ because the firm is experiencing ________ returns to scale. A-constant returns; constant B-economies of scale; increasing C-economies of scale; constant D-diseconomies of scale; increasing E-diseconomies of scale; decreasing 7.A firm's implicit costs are $10,000, explicit costs are $5,000, and its total revenue is $10,000. This firm is earning A-normal accounting profit B-positive accounting profit of $5,000 C-positive economic profit of $5,000 D-normal economic profit E-negative accounting profit of $5,000
2. Based on your answer in 1, identify two key features of long run equilibrium and determine the price associated with this period.
23. Suppose the market for gourmet chocolate is in long-run equilibrium, and an economic downturn has reduced consumer discretionary incomes. Assume chocolate is a normal good, and the chocolate producers have identical cost structures. What will happen to demand—shift right, shift left, no shift? What will happen to profits for chocolate producers in the short run—increase, decrease, or no change? What will happen to the short-run supply curve—increase, decrease, or no change? What will happen to the long-run supply curve—increase, decrease, or no change?
18. Which of the following are short-run decisions and which arelong-run decisions?a. General Motors decides to add a second shift to itsArlington, Texas production plant.b. Gotham Foods International chooses to exit the restaurantindustry to concentrate on its wholesale grocerysupply business. c. The Sahara Hotel and Casino in Las Vegas closes two of itsthree hotel towers in response to low demand.d. Tony Andretti, owner of Tony the Taxman, hires five newCPAs to work at his tax preparation business.e. German tool and appliance manufacturer Bosch enters theelectric bicycle industry in 2010.f. General Electric builds a new offshore wind manufacturingplant in the United Kingdom.
7) Refer to Figure 13-15 to answer the following questions. What is the profit-maximizing output level? What is the profit-maximizing price? What is the average total cost at the profit-maximizing output level? What area represents the firm's profit? At which output level are economies of scale exhausted? Does this graph most likely represent the long run or the short run? Why?