Consider a firm in a competitive industry. The firm's average cost curve and marginal cost curve are depicted below. All firms in the market are identical. Suppose the market is in equilibrium, and the firm is currently losing $1,200 daily. Use the point tool to indicate the quantity/price point at which this firm must be producing. To refer to the graphing tutorial for this question type, please click here. 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 a

Consider a firm in a competitive industry. The firm's average cost curve and marginal cost curve are depicted below. All firms in the market are identical. Suppose the market is in equilibrium, and the firm is currently losing $1,200 daily. Use the point tool to indicate the quantity/price point at which this firm must be producing. To refer to the graphing tutorial for this question type, please click here. 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 a

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 10WNG

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According to the accompanying table, what quantity of output should the firm produce? Explain your answer.
Consider the perfectly competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MCMC), average total cost (ATCATC), and average variable cost (AVCAVC) curves shown on the following graph. The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. If there were 20 firms in this market, the short-run equilibrium price of steel would be per ton. At that price, firms in this…
Assume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $56.00 (i) Will this firm produce in the short run? (Click to select) No Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select) Not applicable Loss-minimizing…
Assume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $ 60.00 $ 45.00 $ 105.00 $ 45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 a. At a product price of $56.00 (i) Will this firm produce in the short run? yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? profit- maximizing output = 9 units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 16 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the…
The table below provides revenue and cost information for a perfectly competitive firm producing computers. Over what output range will this firm incur losses? What is the slope of the total revenue curve? At about how many computers per day do economic profits seem to be at a maximum? Graph the economic model of this firm.
Suppose Jayden operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with a market price equal to $20 per phone case. The following graph shows Jayden's total cost curve. Jayden's profit is maximized when they produce a total of ____phone cases. At this quantity, the marginal cost of the final phone case they produce is ___, an amount ( greater or less)than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is ____, an amount(greater or less)than the price received for each phone case they sell. Calculate the marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points to plot marginal revenue and the orange points to plot marginal cost at each quantity.
The accompanying graph depicts the cost curves of an individual firm in a perfectly (or purely) competitive industry.
Use Table: Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $50, what quantity will Sergei produce to maximize profit?
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The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow. i. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.