Explain why a firm should continue to operate in the short run so long as market price is greater the firm's average variable cost at the profit-maximizing level of outpu
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4) Explain why a firm should continue to operate in the short run so long as market price is greater the firm's
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- Figure 1 shows the short-run cost curves of a toy producer. The market has 1,000 identical producers and Table 1 shows the market demand schedule for toys. At what market prices would the firm shut down temporarily? What is the market price of a toy in long-run equilibrium? How many firms will be in the toy market in the long run? Explain your answer.[TRUE / FALSE] Please explain In the real-world, marginal cost curve is usually U-shaped.Therefore, in a perfectly competitive market, a firm can maximize profit at two different output levels in the short-runQuestion 9 Which of the following is(are) correct? A competitive firm will exit the market in the long-run if economic profit is zero. A competitive firm will shut down in the short-run if the price is below average total cost. A: 1 only B: 2 only C: Both 1 and 2 D: Neither 1 nor 2
- Question 23 A competitive firm has a total cost function in dollars of the form C(q)= 100–4q + q^2, where q is output. Suppose the market price is $10 per unit of output. What is the firm’s short run point elasticity of supply? a) 20/7 b) 5/7 c) 10/7 d) 0.5 e) 27. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.1. Consider a typical perfectly competitive firm with an increasing MC curve. At the current output, the market price is $8, while the MC is $6, the AVC is $5, and the AC is $10. Hence, the firm can likely increase its profit in the short run by... increasing price. reducing output (Q). reducing the price. shutting down production. increasing output (Q). 2. Which of the following is true in the long run equilibrium of a perfectly competitive market? price (P) < average variable cost (AVC) price (P) = 0 price (P) > marginal cost (MC) price (P) = average cost (AC)
- In the short run, a firm that finds itself earning a loss should compare the market price to which cost in order to determine whether or not to shut-down? Question 16 options: a Average total costs b Average variable costs c Marginal costs d Fixed costs7. Short-run supply and long-run equilibrium Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for titanium. Use the orange points (square symbol) to plot the initial 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 titanium would…Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 175 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could increase your expected lifespan by 5 years. The publication is expected to cause consumers to demand (less/more) seitan at every price. In the short run, firms will respond by ( attached image). Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication In the long run, some firms will respond by (attached image) until (consumer demand returns to original level, each firm in the industry is once again earning zero profit, seitan populations grow large enough to support more firms, new technologies are discovered that lower costs) Now Shift the demand curve, the supply curve, or both on another graph (same as the first) to illustrate both…
- Illustrate and explain how the short-run supply curve of a price-taking firm is determined.30.What is true of a firm's production if it operates in a perfectly competitive market in long-run equilibrium? Marginal revenue = demand = marginal cost > average total cost Marginal revenue = marginal cost = average fixed cost Average total cost = price = average variable cost Marginal cost < Marginal revenue Price = marginal cost = average total cost(10) In long-run equilibrium in a perfectly competitive market, which of the following is true? (a) Average cost equals marginal cost (b)Profit = 0 (C)Price equals marginal cost (d)all of the above
