8$12.5$10.08.0$7.5$5.0$2.5$0.00 10 20 30 40 50 60 70 80 90 100110120130Quantity$10When maximizing profit, the perfectly competitive firm depicted in the graph will earn per-unitprofit approximately equal to:$7.5MC ATCO $2.5O $2.10P-MR

In this question, we have to find per unit profit at a profit-maximizing output level. We have given…

Answered: $12.5 3 $10.0 8.0 $7.5 $5.0 $2.5 $0.0 0…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 18P

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Similar questions

Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand 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 firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
What are the four basic assumptions of perfect competition? Explain in words what they imply for a perfectly competitive firm.
What is a price taker firm?
Suppose a perfectly competitive firm is operating in short run. The information of MR, Q,ATC and AVC are 15 taka, 60 unit, 45taka and 35 taka respectively. Calculate firm’sprofit/loss and total fixed cost. From these calculations and based on all the giveninformation, can you conclude about the firm’s decision in short run? Explain your reasoningwith the help of a suitable diagram. Show all the relevant information in yourdiagram.[Q=profit maximizing output and MR=marginal revenue]
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.
5. The cost function for a firm facing perfect competition isC(q)=1000+25q-0.5q^2+0.01q^3 Sketch the firm’s cost curves and supply curve on one set of axes. a.sketch MC,AVCAFC, and ATC. The basic shapes and relationshipsshould reflect the cost functions above,but you do not need exact numbers. b. On the same axes,sketch the firm’s supply curve.Your curve shouldstart from P=0.
14. Zero economic profit earned by firms in a perfectly competitive market indicates that A firms will exit in the long run.B total revenue covers all variable costs of production exactly.C MR < AR.D P = ATC.E zero normal profit.
Answer the following questions based on the data provided below for the competitive firm. Assume that fixed cost is equal to $100. All figures are in dollars. q AVC ATC MC 0 - - - 1 17 117 17 2 16 66 15 3 15 48.33 13 4 14.25 39.25 12 5 14 34 13 6 14 30.67 14 7 15.71 30 26 8 17.50 30 30 9 19.44 30.55 35 10 21.60 31.60 41 11…
Answer the following questions based on the data provided below for the competitive firm. Assume that fixed cost is equal to $100. All figures are in dollars. q AVC ATC MC 0 - - - 1 17 117 17 2 16 66 15 3 15 48.33 13 4 14.25 39.25 12 5 14 34 13 6 14 30.67 14 7 15.71 30 26 8 17.50 30 30 9 19.44 30.55 35 10 21.60 31.60 41 11…
Answer the following questions based on the data provided below for the competitive firm. Assume that fixed cost is equal to $100. All figures are in dollars. q AVC ATC MC 0 - - - 1 17 117 17 2 16 66 15 3 15 48.33 13 4 14.25 39.25 12 5 14 34 13 6 14 30.67 14 7 15.71 30 26 8 17.50 30 30 9 19.44 30.55 35 10 21.60 31.60 41 11…
The following table shows the output and total cost for a firm in a purely competitive industry Output TC AC MC 0 40 1 95 2 115 3 130 4 150 5 175 6 210 7 260 8 330 Complete the table

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$12.5 3 $10.0 8.0 $7.5 $5.0 $2.5 $0.0 0 10 20 30 40 50 60 70 80 90 100110120130 Quantity O $10 When maximizing profit, the perfectly competitive firm depicted in the graph will earn per-unit profit approximately equal to: $7.5 MC ATC $2.5 $2.10 P-MR