Explain in words why a profit-maximizing firm will not choose to produce at a quantity where marginal cost exceeds marginal revenue.

Q: In principle, how do we determine a perfectly competitive firm's profit-maximizing output and…

A: Perfect competition refers to the type of market structure in which there are many buyers and…

Q: competitive market price is $60, and a competitive firm’s total costs = q^2 - 6q + 990 and marginal…

A: * SOLUTION :-

Q: What is the slope of average revenue curve in a market In which firm can sell more only by lowering…

A: Average revenue is given by the formula:- AR = TR/Output

Q: Why is the level of output at which marginal revenue equals marginal cost the profit-maximizing…

A: Every producer produces services and goods and sells them in the market. The main objective of every…

Q: If all the apple orchards in the United States are earning zero economic profits, the apple market…

A: Profit is defined as the difference between the total revenue and total costs. Total revenue is the…

Q: Explain the fact that the short-run supply curve for a price taking firm is that segment of its…

A: The individual supply curve of short-run is the marginal cost of an individual at all of the points…

Q: a profit-maximizing firm finds that, at its current level of production, MR > MC, it will *…

A: marginal revenue= change in total revenue/change in quantity Marginal cost= change in total…

Q: Illustrate and explain how the short-run supply curve of a price-taking firm is determined.

A: In a price taking firm, the demand curve is a straight line parallel to x axis which is equal to…

Q: Shazam, a maker of magic wands, is selling in a purely competitive market.  Its output is 500 wands,…

A: In case of pure competition sellers & buyers are in large numbers & perfectly informed that…

Q: When a competitive firm doubles the amount it sells, what happen to the price of its output and its…

A: In a perfectly competitive market structure there are large number of buyers and sellers selling…

Q: Suppose the market for apples is perfectly competitive. The short-run average total cost and…

A: A perfectly competitive firm is a price taker. It accepts the market price as given.

Q: f a competitive industry is incurring normal profits, output will

A: Competitive Industry is the industry sector where the firms are free to enter and exit from the…

Q: How much should a firm sell of a particular product in order to maximize profit? What factor does it…

A: A firm should maximize profits and bring in the output level, where there would equilibrium point…

Q: The connection between marginal revenue and price depends on a business's competitive environment.…

A: Under perfect competition, there exists a large number of buyers and sellers. Each firm sells…

Q: WHY SOME FIRMS MIGHT BE ABLE TO CONTINUE TO MAKE AN ACONOMIC PROFIT IN THE LONG RUN?

A: A monopoly occurs when a single person or corporation serves as the exclusive supply of a certain…

Q: How to find the inverse demand equation faced by a perfectly competitive market?

A: In perfect competition, eqm. qty is determined by the intersection of MC(marginal cost) and…

Q: How we can understand the Long-run Normal price in increasing cost industry, and the Long-run Normal…

A: When a business expands, its average expenses rise. This is known as an increasing-cost industry…

Q: Why wouldn’t a firm just drop any product that isn’t selling inhigh enough volume to reach its…

A: While analysing producer’s equilibrium, break-even point is a no profit, no loss situation. That is…

Q: If a firm is producing at a quantity in which the marginal cost exceeds marginal revenue, the firm…

A: In a market, an optimal or a Profit Maximizing quantity for a firm is when it is producing at a…

Q: on. What are the profit-maximizing level of output and price respectively?

A: Profit maximizing level of output in monopoly achieved where monopoly's  Marginal Revenue (MR) =…

Q: Donald is a producer in the perfectly competitive market for cronuts - a pastry that is half…

A: Here we calculate the market price per coconut at when Donald profit is maximized so by using the…

Q: Why is the marginal revenue of a perfectly competitive firm equal the market price?

A: Marginal revenue: it refers to the additional revenue received from the sale of an additional good.…

Q: If a firm makes zero economic profit, it will exit the market in the long run. Do you agree?…

A: No economic profit is also referred as normal profit. Economic profit is calculated by subtracting…

Q: Explain why a profit-maximizing competitive firm would produce up to the point where price equals…

A: The marginal cost of creation is the adjustment of absolute creation cost that comes from making or…

Q: In competitive markets economic profit becomes zero in the long-run. However, it is also possible…

A: Accounting profit: Accounting profit is obtained by deducting the total explicit cost from the the…

Q: For a firm with a downward-sloping demand curve, which of the following is true at the…

A: Imperfect competitive firms face a downward sloping demand curve.

Q: In a perfectly competitive market, what is the marginal revenue curve

A: Meaning of Perfectly Competitive Market: The perfectly competitive market exists when there is a…

Q: Derive theoretically and graphically the supply curve of an industry.

A: The supply curve shows the relationship between the quantity supplied and the prices, it depicts the…

Q: Using curves, graphically, a firm will shutdown if what? What is an output at which the firm makes a…

A: Economic profit refers to the excess of total revenue over total cost.  To calculate the economic…

Q: Consider a firm that is indifferent between shutting down and continuing to operate in the short run…

A: Given that, Market price = $50 Total cost = $600 Average fixed cost = $10 We have to find revenue of…

Q: Which of the below will NOT occur if exitings firms are earning positive economic profits in a…

A: The perfectly market would result in the many buyers and many buyers sellers in the market. The…

Q: Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the…

A: The change in total cost to change in output is known as marginal cost. The marginal cost is the…

Q: Suppose that a firm could sell 18 units of output for $100 each or $19 units of output for $98 each.…

A: Marginal revenue is increase in total revenue due to sale of one more unit of output.

Q: If the price was given what is the formula equation to figure the "profit-maximizing quantity of…

A: Perfect competition is a market situation where there are many buyers and sellers. Thus, the firm is…

Q: A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has…

A: The quantity, q = 100 The average revenue is given as = $10 The formula for total revenue is as…

Q: Explain the effects firms entering or exiting have on the price and supply of a market. (assume the…

A: A perfectly competitive market is a type of market structure in which a large number of small firms…

Q: Assume that the marginal revenue equals rising marginal cost at 100 units of output. At this output…

A: The income gained by increasing product sales by one unit is referred to as marginal revenue in…

Q: Consider the perfectly competitive market for pineapples, which is in long-run equilibrium. Now…

A: Pure or perfect competition is a hypothetical market structure in which the accompanying models are…

Q: What is the​ firm's shutdown​ point?   A firm will stop producing an output in the short run when…

A: A shutdown point is the point where the marginal revenue of the firm becomes equal to the variable…