d. How will the paper industry adjust to a new long-run equilibrium following the changes resulting from the decrease in consumer income? Specifically, what will happen to: i. Market price for paper ii. Quantity of paper produced for the representative firm iii. The number of businesses in the paper market 2. Suppose that the market for cell phone cases is monopolistically competitive. a. Cell phone case companies are earning economic profits. Use the blank axes below to draw a correctly and thoroughly labeled graph for a representative firm in the industry showing each of the following items: i. The representative firm's profit-maximizing output and price ii. The rectangle representing the firm's economic profit

d. How will the paper industry adjust to a new long-run equilibrium following the changes resulting from the decrease in consumer income? Specifically, what will happen to: i. Market price for paper ii. Quantity of paper produced for the representative firm iii. The number of businesses in the paper market 2. Suppose that the market for cell phone cases is monopolistically competitive. a. Cell phone case companies are earning economic profits. Use the blank axes below to draw a correctly and thoroughly labeled graph for a representative firm in the industry showing each of the following items: i. The representative firm's profit-maximizing output and price ii. The rectangle representing the firm's economic profit

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 5PA

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Similar questions

Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
2. Now draw a firm operating under perfect competition that is losing money but should still stay open in the short run. (Again, show both the firm and the industry graphs)a. What happens over-time, if many firms are suffering economic losses?b. Is this good or bad for consumers? Explain.
1. Draw a graph representing a perfectly competitive firm earning an economic profit.(Make sure to show both the firm and the industry graphs)a. What happens over time, if many firms are earning economic profits?b. Is this good or bad for consumers? Explain.2. Now draw a firm operating under perfect competition that is losing money but shouldstill stay open in the short run. (Again, show both the firm and the industry graphs)a. What happens over-time, if many firms are suffering economic losses?b. Is this good or bad for consumers? Explain.
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Rebecca owns Louisiana Sugar Company, a manufacturer of sugar. Since there are lots of domestic manufacturers and importers of sugar and it is difficult to practice brand differentiation, the sugar industry is highly competitive. Suppose the demand for sugar increases. (1) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why. (2) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why.
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(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm. The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit. If the market price is $3, the firm will produce units of output per day. Price (per unit) MC ATC $3.00 -d 2.00 1.90 TI 1.00 100 250 300 400 Output (per pday) 400 100 300 250
6. a..Illustrate the Perfectly Competitive Firms earning abnormal economic profit in the short run. b..Illustrate the Monopolistic Firms making a loss in the short but will continue to operate.
Consider the following short-run data for a perfect competitor. Use the data to answer the following questions. Justify your answers and calculations. Quantity Demanded Price TC TVC MC 0 22 150 - 1 20 2 15 3 22 4 34 5 54 6 78 d) What is the profit maximizing level of output for this producer? e) Calculate profits or losses at all levels of output.