A firm in a perfectly competitive market uses only workers to produce output. The relationship between the number of workers and the amount of output is given in the table attached. Suppose the wage paid to a worker is $100, and the firm has fixed costs of $500.   a. Complete the table by filling in marginal product (MP), variable cost (VC), total cost (TC), and marginal cost (MC). b.Suppose the price of the good they produce is $25. What quantity does this firm produce in the short run? What are its profits? Show your work and explain your answer. c. Is the market in long-run equilibrium? Explain. If it is not, explain what will happen to the price in the market and the quantity produced by each firm as the market transitions to long-run equilibrium.

Q: Discuss how the production theory and price determinations help businesses achieve both their…

A: The Theory of Production is defined as an effort to explain the principles that are followed by…

Q: Which of the following is an essential characteristic of a perfectly competitive market? Multiple…

A: A perfectly competitive firm is a price taker, which means the price is determined by the market…

Q: Firms in a perfectly competitive market are said to be “price takers”—that is, once the market…

A: In perfect competition, there are a large number of buyers and sellers dealing with homogeneous…

Q: 25. A firm uses capital, K, and labor, L, to produce output, q, in a perfectly competitive market.…

A: q = aL + bK The linear production function depicts that inputs L and K are substitutes for each…

Q: 1.q. 25. A firm uses capital, K, and labor, L, to produce output, q, in a perfectly competitive…

A: The production function depicts the technological relationship between the input and the output. A…

Q: Which of the following is not an assumption we make about perfectly competitive markets? a)Firms…

A: Perfect competition refers to the form of market in which large number of firms exists.

Q: Please explain whether the following statements are true or false. Question (a) if the owner of a…

A: The potential benefits that a person, investor, or company loses out on by choosing one option over…

Q: A perfectly competitive market is in a long-run equilibrium. Prices of variable inputs for the…

A: A competitive firm is most efficient among other market structures.  The assumptions of perfect…

Q: explain why a firm might want to produce its good even after diminishing marginal returns have set…

A: The firm may wish to continue operating and manufacturing products even after decreasing marginal…

Q: The figure below shows the supply and the demand for a good (left) and the cost curves of an…

A: A perfectly competitive market has the following characteristics: There are a large number of…

Q: Describe the behavior of a rational producer in a perfectly competitive market, using the concepts…

A: A rational producer in a perfectly competitive market will keep the price at an equilibrium level…

Q: Given the following parameters: Perfect Competition in Output Market Perfect Competition in Labour…

A: The wage is determined by the market forces of demand and supply. The equilibrium wage is equated…

Q: Suppose you are hired as an economic consultant for Promax Consulting Company.  Your job is to…

A: The perfectly competitive firm, maximize its benefit when its minimal expense is equivalent to the…

Q: Long-Run Competitive Equilibrium it is included as a cost and are not included in economic profit.…

A: Perfect competition denotes the highest level of competition among all market structures. Under…

Q: The profit-maximizing (or loss-minimizing) perfectly competitive firm will want to produce the…

A: Under perfect competition, the profit maximizing (or loss minimizing) condition for the firm is to…

Q: Suppose that the market for apples is perfectly competitive. Production of apples requires two…

A: Q=3K1/3L2/3Marginal Product ofLabor Differentiate Q with respect to L MPL=2K1/3L-1/3Marginal Product…

Q: Productive efficiency means output (production) is produced in the long run at

A: A perfectly competitive market is the type of market structure in which several buyers and sellers…

Q: A manager hires labor and rents capital equipment in a very competitive market. Currently the wage…

A: Given wage rate (w) = $12Capital rent (r) = $8Marginal product of labor (MPL) = 60 unitsMarginal…

Q: A perfectly competitive firm would produce______________________________________if it wanted to…

A: Perfect competition: It is the market that has the greatest level of competition.

Q: Suppose LA.Banana employs workers to harvest bananas. Answer the following questions using the…

A: Quantity of labor Units of Output Marginal Product  VMPL (20* MP(L) Profit (20*Output - 800)…

Q: Assume a firm is trying to maximize output subject to a budget and is currently in the long run…

A: The long-run is the timeframe when all expenses are variable. The long-run relies upon the points of…

Q: A perfectly competitive industry achieves allocative efficiency in the long run. What does…

A: Answer: Correct option: (C) Explanation: Allocative efficiency: allocative efficiency in the long…

Q: Why Law of Diminishing Returns is a short run law?

A: Law of Diminishing returns states that as more of the variable factor is combined with the fixed…

Q: Which of the following is characteristic of a perfectly competitive market? a. There is free entry…

A: A market is determined as perfectly competitive, Monopoly, or any other form according to its…

Q: Market failure occurs when      A) resources are misallocated or allocated inefficiently. B)…

A: Market failure refers to when the market is in disequilibrium condition because of market…

Q: Explain and illustrate using isoquants and isocosts how a firm that is currently using the least…

A: For a given isoquant, firm is trying to minimize the cost of production using the inputs…

Q: Refer to the table below, which shows the relationship between labour and output for a perfectly…

A: Marginal cost (MC): - it is the additional cost incurred due to the production of additional units…

Q: In the short run, the firm should continue to produce if and only if a.Price exceeds average total…

A: Total fixed cost is independent of output produced whereas  variable cost varies with the level of…

Q: If a competitive firm uses two inputs and has the production function F(x1, 22) = VI1+ væ2, then its…

A: The production function is the maximum output that can be produced with the given technology. The…

Q: Suppose a perfectly competitive firm uses labor and capital to produce. In the short run, the…

A: In the short run production decision depends on average variable cost as firms have to incur fixed…

Q: Productive efficiency and allocative efficiency are two concepts achieved in the long run in a…

A: Perfect competition is a competition where the firms in the market are price takers and have no…

Q: Suppose that Jacques, Julia, Cat, and Guy are potential suppliers of catering services for weddings.…

A: Given:  There are 4 potential suppliers of catering services.  Name Cost Jacques $50,000…

Q: Firms in a perfectly competitive market are said to be "price takers" - that is, once the market…

A: The perfect competitive market is a type of market, which is characterized by a large number of…

Q: Consider a firm that is perfectly competitive in the market for inputs and outputs. The firm hires…

A: Given information Production function F(L,H)=(AH)αLβ Q=(AH)αLβH= High skilled laborL=Low skilled…

Q: Suppose that in a perfectly competitive market, one individual firm uses two inputs: Labor (L) and…

A: Since the question you have posted consists of multiple parts, we will solve the first two parts for…

Q: Suppose that the market for microwave ovens is a competitive market. The following graph shows the…

A: Calculated in a table are total revenue, fixed costs, variable costs, total costs, and profits…

Q: Consider a firm that is perfectly competitive in the market for inputs and outputs. The firm hires…

A: Hi there , as per our guidelines we are only allowed to solve 3 sub parts of a question at a time .…

Q: The supply curve of a competitive firm is the postion of marginal cost that is

A: In a competitive firm, the demand curve is horizontal because the market sells identical goods so…

Q: Each firm in a perfectly competitive industry has the following production function: q = K1/4L1/4…

A: To calculate the total number of firms in the industry, first we must be aware of the fact that in…

Q: Which of the following best applies to the distinction between the "long run" and the "short run"?…

A: The long-run is the situation when there are no fixed factors (every factor is considered as a…

Q: Q.7) If the marginal product is equal to the average product; a) the average product curve is…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Consider a perfectly competitive market where variable input markets are also perfectly competitive…

A: Perfect competitive market is the market structure where number of buyers and sellers are selling…

Q: The following diagrams show the market for a good, as well as the cost curves for an individual firm…

A: Equilibrium is achieved at a point where demand curve intersects the supply curve. Breakeven occurs…

Q: Utilize the graph above, which illustrates average fixed costs, average variable costs, average…

A: The given graph below highlights the perfectly competitive market Therefore I represents Average…

Q: The law of diminishing returns indicates that: a. as extra units of a variable resource are added to…

A: (Q) The law of diminishing returns indicates that: a. as extra units of a variable resource are…

Q: If the firms in a market have accounting profits that are larger than their implicit costs, then, in…

A: Answer: If the firm has accounting profit larger than the explicit cost it means the firm is earning…

Q: When we know that the firms must be producing at the minimum point of the average cost curve and so…

A: To find : When will be productive efficiency.