a. At a product price of $57.00 (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? |(Click to select ♥output =| units per firm (iii) What economic profit or loss will the firm realize per unit of output? [(Click to select ♥ per unit = $ b. At a product price of $42.0O (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select ♥output =| units per firm (iii) What economic profit or loss will the firm realize per unit of output? (Click to select v per unit = $ C. At a product price of $33.00

a. At a product price of $57.00 (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? |(Click to select ♥output =| units per firm (iii) What economic profit or loss will the firm realize per unit of output? [(Click to select ♥ per unit = $ b. At a product price of $42.0O (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select ♥output =| units per firm (iii) What economic profit or loss will the firm realize per unit of output? (Click to select v per unit = $ C. At a product price of $33.00

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Perefect Competition

Section: Chapter Questions

Problem 5SQP

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Similar questions

Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?
If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
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
What two rules does a perfectly competitive firm apply to determine its profit-maximizing quantity of output?
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
The market for fertilizer is perfectly competitive.Firms in the market are producing output but arecurrently incurring economic losses.a. How does the price of fertilizer compare to theaverage total cost, the average variable cost, andthe marginal cost of producing fertilizer?b. Draw two graphs, side by side, illustrating thepresent situation for the typical firm and for themarket.c. Assuming there is no change in either demand orthe firms’ cost curves, explain what will happenin the long run to the price of fertilizer, marginalcost, average total cost, the quantity supplied byeach firm, and the total quantity supplied to themarket.
Suppose that each firm in a competitive industry has thefollowing costs: Total cost: TC=50 + 1/2q^2 Marginal cost: MC=q where q is an individual firm’s quantity produced. The marketdemand curve for this product is Demand: QD = 120 – P where P is the price and Q is the total quantity of the good.Currently, there are 9 firms in the market. a. What is each firm’s fixed cost? What is its variable cost?Give the equation for average total cost. b. Graph average total cost curve and the marginal cost curvefor q from 5 to 15. At what quantity is average total cost curve atits minimum? What us marginal cost and average total cost at thisquantity? c. Give the equation each firm’s supply curve. d. Give the equation for the market supply curve for the shortrun in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market inthe short run? f. In this equilibrium, how much does each firm produce?Calculate each firm’s profit or loss. Is there incentive for…
An industry currently has 100 firms, each of whichhas fixed cost of $16 and average variable cost asfollows:Quantity Average Variable Cost1 $12 23 34 45 56 6a. Compute a firm’s marginal cost and average totalcost for each quantity from 1 to 6.b. The equilibrium price is currently $10. How muchdoes each firm produce? What is the total quantitysupplied in the market?c. In the long run, firms can enter and exit themarket, and all entrants have the same costs asabove. As this market makes the transition to itslong-run equilibrium, will the price rise or fall?Will the quantity demanded rise or fall? Will thequantity supplied by each firm rise or fall? Explainyour answers.d. Graph the long-run supply curve for this market,with specific numbers on the axes as relevant.
Suppose that each firm in a competitive industry has the following costs: Total cost: TC= 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 − PThere are 9 firms in the market.e) What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm’s profit.f) In the long run with free entry and exit, what is the equilibrium price and quantity in thid market. Is there incentive for firms to enter or exit? h) In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
Q23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.