Consider a perfectly competitive market and a firm's average total cost curve and marginal cost curve, as well as the market supply and demand curves.MC10.00-10.00-9.00-9.00-8.00-8.00-7.00-ATC7.00-6.00-6.00-5.00-5.00-4.004.00-3.00-3.00-2.00-2.00-1.00-1.00-0.00-0.00-468 10 12 14 16 18 209 10Quantity (bushels of wheat 1000s)Quantity (bushels of wheat 1,000,000s)Firms in the short run areThe long-run equilibrium price will be $(Round your answer to an integer)Hence, firms willthe market until the marginal firm is earningzero accounting profitzero economic profit

Consider a perfectly competitive market and a firm's average total cost curve and marginal cost curve, as well as the market supply and demand curves. MC 10.00- 10.00- 9.00- 8.00- 9.00- Q 8.00- 7.00- ATC 7.00- 6.00- 6.00- 5.00- 5.00- 4.00- 4.00- 3.00- 3.00- 2.00- 2.00- 8 1.00- 8 1.00- e 0.00 o 2 4 6 8 10 12 14 16 18 20 à 0.00+ 2345 678 9 10 Quantity (bushels of wheat 1000s) Quantity (bushels of wheat 1,000,000s) Firms in the short run are The long-run equilibrium price will be S (Round your answer to an integer) Hence, firms will the market until the marginal firm is earning zero accounting profit zero economic profit Price and cost (dollars per bushel) Price and cost (dollars per bushel)

Consider a perfectly competitive market and a firm's average total cost curve and marginal cost curve, as well as the market supply and demand curves. MC 10.00- 10.00- 9.00- 8.00- 9.00- Q 8.00- 7.00- ATC 7.00- 6.00- 6.00- 5.00- 5.00- 4.00- 4.00- 3.00- 3.00- 2.00- 2.00- 8 1.00- 8 1.00- e 0.00 o 2 4 6 8 10 12 14 16 18 20 à 0.00+ 2345 678 9 10 Quantity (bushels of wheat 1000s) Quantity (bushels of wheat 1,000,000s) Firms in the short run are The long-run equilibrium price will be S (Round your answer to an integer) Hence, firms will the market until the marginal firm is earning zero accounting profit zero economic profit Price and cost (dollars per bushel) Price and cost (dollars per bushel)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 10SQP

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Firm Alpha operates in a perfectly competitive market in a constant-cost industry and is earning negative economic profit. How does Firm Alpha determine its profit-maximizing quantity of output? Explain. Draw correctly labeled side-by-side graphs for Firm Alpha and the market it operates in. Label the axes and all of the following: Market price (PE) and market quantity (QE) The firm's quantity of output (Qe) The firm's average total cost (ATC) Completely shade the area of the firm's total cost. Identify whether the following increase, decrease, or remain constant as the market moves to long-run equilibrium: Market equilibrium quantity Market equilibrium price Assume the product that Firm Alpha produces has a negative externality. Draw the marginal social cost (MSC) on the market graph from part (b). Will the unregulated market produce more or less than the socially optimal quantity? Label the socially optimal quantity (Qso) for the market on your graph from part (b).…
Firm Alpha operates in a perfectly competitive market in a constant-cost industry and is earning negative economic profit. How does Firm Alpha determine its profit-maximizing quantity of output? Explain. Draw correctly labeled side-by-side graphs for Firm Alpha and the market it operates in. Label the axes and all of the following: Market price (PE) and market quantity (QE) The firm's quantity of output (Qe) The firm's average total cost (ATC) Completely shade the area of the firm's total cost. Identify whether the following increase, decrease, or remain constant as the market moves to long-run equilibrium: Market equilibrium quantity Market equilibrium price Assume the product that Firm Alpha produces has a negative externality. Draw the marginal social cost (MSC) on the market graph from part (b). Will the unregulated market produce more or less than the socially optimal quantity? Label the socially optimal quantity (Qso) for the market on your graph from part (b).