Firms with market power Select one: a. face downward sloping marginal cost curves. b. maximize profit but fail to maximize social surplus. Oc. produce where P = MR = MC. Ⓒd. face downward sloping average cost curves.
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- perfectly competitve firms respond to changing market conditions by varying their (choose 1 below) 1-price 2-output 3-market share 4-informationAnswer both parts a and b please. Part a) True or False: In a competetive market, a firm's short run supply curve is sloping upwards due to diminishing returns of the variable input. Explain why. Part b) Are long run supply curves always upward sloping? Explain why or why not with a graph.Explanation it correctly and in detail. Q)As long as there is free entry into a market:- A. accounting profits will be zero. B. economic profits are not sustainable. C. firms in that market can maintain market power. D. firms in that market can sustain prices above average total cost.
- In competitive equilibrium.. (choose all that apply) economic surplus is maximized deadweight loss is maximized marginal benefit = marginal cost everyone is better offIf a single firm with demand Q=100-2P (Q=quantity, P=Price), reduces its constant marginal costs from £8 to £4 then Consumer Surplus (CS) and Producer Surplus (PS) after the reduction in marginal costs will be... a. CS=1058 PS=529 b. CS=2116 PS=1058 c. CS=1000 PS=500 d. CS=500 PS=1000 e. CS=529 PS=1058You make delicious cupcakes that you mail to customers across the country. Your cupcakes are so unique and special that you have a great deal of pricing power. Your customers have identical demand curves for your cupcakes, and a representative customer’s demand curve is shown below. (It’s not needed, but the demand curve equation is P=5-0.2Q or Q=25-5P.) Suppose your MC=$1/cupcake, whether you produce lots or just a few cupcakes. To keep things simple, suppose there are no fixed costs, so FC=0. a) Acting as a monopolist, show the standard pricing analysis on the graph below that identifies your profit-mamximing price and quantity for your representative customer. Shade areas representing your profit and CS. (PS and profit are the same here since FC=0). b) Suppose you offer a quantity discount: first 10 cupcakes at $3 each and any cupcakes over 10 are offered at a discounted price. What discount price will maximize your profit? Show this quantity discount arrangement on your graph…
- If the market price of good is $30, the average revenue of a competitive firm selling five units is? A: $130 B: $6 C: $30 D: $12.5A. Complete table. B. Applying the rule of profit maximization, if the product market price of $35, will this firm produce, why or why not?A market has an inverse demand curve of P = 40-Q and marginal cost of MC = 4+2Q. Find the competitive equilibrium price, quantity, and surplus. Show your work.
- change the questions or use different values? Question 1. In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as: TC = 50 +2Q + 3Q2 Find the Firm’s marginal cost? Show your steps, including graphs. Review additional resources? Hint: See the rules for differentiationTwo tomato processing plants are located along a line 100 miles long. Plant 1 is at mile 30 and offers $2.00/lb minus transportation cost (which both plants pay). Plant 2 is at mile 70 and pays $1.75/lb minus transportation cost. Transportation costs for both firms are the same and are equal to $0.05/lb + ($0.02/lb-mi) D, where D is the distance from the farm to the plant. a) Find the boundary between the two plants’ supply regions. b) Where does the boundary shift to if plant 2 matches plant 1’s price?In perfect competition, given certain assumptions hold, the equilibrium quantity will automatically be Question 4 options: Efficient, and the distribution of goods will also be completely equal Inefficient and too large - capitalistic sellers flood the markets! Efficient Inefficient and too small - sellers don't supply enough because they don't care about buyers
