36. Independent of the market structure, the necessary condition for a profit maximisation states: a) Price must be equal to marginal cost. b) Price must be equal to marginal revenue. c) Marginal revenue must be equal to marginal cost. d) Profits must always be positive.
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- Question 23 A competitive firm has a total cost function in dollars of the form C(q)= 100–4q + q^2, where q is output. Suppose the market price is $10 per unit of output. What is the firm’s short run point elasticity of supply? a) 20/7 b) 5/7 c) 10/7 d) 0.5 e) 2In a perfectly competitive market, a single firm that sets its price a small amount above the market price will do which of the following? a.Not sell any units at all b.Have lower revenues but receive zero economic profits c.Make lower profits than other firms, but the exact amount less depends on the elasticity of demand for the product d.Earn profits higher than other firms as long as the other firms continued to charge the market price1) 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…
- What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be A. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. B. many buyers and nothingsellers, with all firms selling identical products, and substantial barriers to new firms entering the market. C. many buyers and sellers, with firms selling similar but not identical products, with low barriers to new firms entering the market. D. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market.Suppose that a perfectly competitive firm faces a market price of $7 per unit. The output level corresponding to a marginal cost of $7 per unit is 1,000 units. At 1,000 units, its average variable costs equal $8 per unit, and its average fixed costs equal $1 per unit. The firm's profit-maximizing (or loss-minimizing) output level = . Write number only. The firm's economic profit (or loss) at this output level = . Write either profit number or loss number: e.g. profit 2000.A firm operates in a perfectly competitive market. Its marginal cost = to its marginal revenue. It is incurring economic losses . Based on this information, which of the following is true? a) An increase in output will decrease the forms economic losses. b) a decrease in output will decrease the firms economic losses. c) Any change in output will fail to result in positive economic profits. d) An increase in price will decrease the firms economic losses. e) the forms marginal revenue exceeds its outputs average total cost
- A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure such that long-run average cost is minimized at an output of 20 units (qi) =20. The minimum average cost is $10 per unit. Total market demand is given by ? = 1,500 − 50?a. What is the industry’s long-run supply schedule?b. What is the long-run equilibrium price (p*)? The total industry output (Q*)? The output of each firm (O*)? The number of firms? The profits of each firm? c. The short-run total cost function associated with each firm’s long-run equilibrium output is given by ?(?) = 0.5?2 − 10? + 200Calculate the short-run average and marginal cost function. At what output level does short run average cost reach a minimum? d. Calculate the short-run supply function for each firm and the industry short-run supply function.e. Suppose now that the market demand function shifts upward to Q =2,000 - 50P. Using this new demand curve, answer part (b) for the very short run…Assume agricultural products are identical and there are many sellers and buyers of agriculture products: State the profit-maximizing condition for each seller of agricultural products. Graphically, it shows the market equilibrium of the industry and a seller where economic profits equal zero. Please include marginal revenues, demand curve, price, and quantity at the equilibrium. From part b above, if the number of buyers increases, show the new short-run equilibrium for a seller and the industry as a whole.Assume that in a PERFECTLY COMPETITIVE MARKET, demand and supply curves are:Demand: p(q) = 16 - q2 and Supply: p(q) = 2q+1.Determine:(a) Total revenue and marginal revenue functions.(b) market equilibrium point (p* and q*). Graphic it