Answered: Graph using MC and MR curves for a firm…

Graph using MC and MR curves for a firm operating in a short-run perfect competition market to make an "excessive profit".

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 8MC

See similar textbooks

Related questions

Q: Perfectly competitive firm that makes economic loses in the short run must cease its operations. do…

A: Perfectly competitive firm is a price taker because there are many sellers in the market selling…

Q: The above diagram illustrates the short run cost curves for Sarah Mat, a rice farmer in Queensland.…

A: In perfect competition, the optimum level of output occurs at the point of intersection of marginal…

Q: must a perfectly competitive industry be in the long run equilibrium if a perfectly competitive firm…

A: The perfectly competitive firm are price takers who accept the industry price. No single firm has…

Q: rm

A: The short run supply curve In a perfectly competitive market is the curve of marginal cost being at…

Q: At what point does a firm in a perfectly competitive industry shut down? Explain with graph.

A: In a perfectly competitive industry, at the profit maximizing level of output, when the market price…

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ? Draw a graph and…

Q: Using diagrams, explain why a perfect competition firm can only make a normal profit in the long…

A: The perfect competition is the Market where there are large number of buyers and sellers who deals…

Q: Under perfect competition, firms profit in the long run will be:- (1) normal profit (2) abnormal…

A: # Perfect competition is a market structure where large number of buyers and sellers are there. The…

Q: der perfect competition, firms profit in the long run will be abnormal profits.

A: A firm's profit is maximized profits in a perfectly competitive market Where marginal revenue (MR)…

Q: The diagram below, shows the cost structure for a firm in perfect competition. Assume that the…

A: The market price in a perfect competition market is 12. At this price, MC intersects ATC. It…

Q: Define Perfect Competition in your own words and what are the characteristics of a Perfect…

A: Perfect competition Perfect competition is a market form in which a large number of buyers and…

Q: Graph represents the cost structure of an individual firm in a perfectly competitive market.…

A: Break even point is defined as the point where total costs of the firm is equal to the total revenue…

Q: What is the shape of the demand curve of a firm under perfect competition

A: # A firm under perfect Competition is a price taker. This is because due to large number of firm's…

Q: Using graph, explain when the firm maximizes its profit under perfect competition?

A: A perfect competition is a market where the firm has a control on quantity of goods to be produced…

Q: Show and explain how the short run supply curve of the perfectly competitive firm is derived.

A: in a perfectly competitive market there are large number of firms producing similar and identical…

Q: Explain Long run equilibrium for a perfect competition

A: The long-run equilibrium point for a perfectly competitive market is said to have occurred where the…

Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?

A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…

Q: A perfectly competitive firm showing a profit

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: the shape of the SR supply curve of a perfectly competitive firm with a diagram.

A: the shape of the SR supply curve of a perfectly competitive firm is

Q: Graph the following for a perfectly competitive firm: A graph showing the area of economic profit…

A: The perfect competitive market is the market with large number of buyers a seller with symmetric and…

Q: Under what conditions should a competitive firm shut down in the short run?

A: In the short term, a corporation that operates at a loss (where the income is less than the overall…

Q: Look at the chart for problem #2 based on perfect competition. The profit that this firm earns when…

A: Below is the given information: TR = P × QMR = TRn-TRn-1∆QATC = TCQMC = TCn-TCn-1∆Q

Q: Explain different possibilities of a firm under perfect competition in short and long run. Explain…

A: Market structure refers to the different characteristics of the markets that differentiate between…

Q: unuou A tomato farmer operates in a perfectly competitive industry. Revenues are $2,000 a montn, toi…

A: Perfectly competitive market structure is the market structure in which there are large number of…

Q: (Figure: Determining Profit) At price F, which of the following is NOT true for this firm in perfect…

A: Perfect competition:- According to theoretical framework, perfectly competitive exists when all…

Q: 5. Questions and Problems 8 You read in a business magazine that computer firms are reaping high…

A: In the long run, many new firms enter the perfectly competituve industry as they are attracted by…

Q: on in sh

A: Perfect competition is a market structure which leads to the Pareto-efficient allocation of…

Q: On x and y axes, draw ATC, AVC, and MC curves and MR curve of a perfectly competitive firm that is…

A: ATC/AC is the average total curve. It is a U shaped curve. AVC is the average variable curve. It is…

Q: Perfect Competition I

A: There are 2 forms of market: Perfect and Imperfect market form. These includes markets like: Perfect…

Q: you read in a business magazine that the computer firms are reaping high profits. with the theory of…

A: In a perfectly competitive market, the new firms and easily join or leave the market. Basically, the…

Q: Using the model of perfect competition, explain what it means to say, “Too much electricity is…

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: Graphing Perfect Competition The following firms or industries are all operating in a perfectly…

A: 1) A firm experiencing economic profit in the short run perfect competitive market: In the working…

Q: At the profit-maximizing output level, what will be the relationship between the perfectly…

A: Perfect competition: Perfect competition is a market structure where exists a large number of…

Q: Consider the following information about a business Rodriguez opened last year: price = $5; quantity…

A: Accounting profit is the net income created by a company. Accounting benefit is a company's net…

Q: Explain market conditions in the long run

A: In the long run, perfectly competitive marketplaces look different than they do in the short run.…

Q: Explain why P=MC in the short run equilibrium of the perfectly competitive firm, whereas in long run…

A: Economic efficiency includes the allocative (P = MC) and productive (MC = AC) efficiencies. Both…

Q: What is the meaning of ''acceptable loss'' for a perfectly competitive firm? Draw a graph and…

A: Acceptable loss means the loss which has to be accepted.This happens generally in perfectly…

Q: Predict and explain the long run equilibrium of a firm operating in a perfectly competitive market?

A: The structure of the market where there are a large number of buyers and sellers selling homogenous…

Q: a) George's hair-cutting business is a profit-maximizing, perfecetly competitive firm. George…

A: Given : Price of haircut=$27 Total cost= $280 (inclusive of Fixed cost=$30) Number of customers per…

Q: a perfectly competitive firm, which of the following statement is wrong? A. It enjoys 0 profit in…

A: Perfect Competition: A perfectly competitive market is the one where there are large number of…

Q: Write down the assumptions of perfect competition

A: Basic assumptions of a perfectly competitive market: 1. large number of buyers and sellers - It…

Q: A requirement for a perfectly competitive market is that the sellers sell identical products…

A: The perfect competition is a market condition in which there are many producers and the production…

Q: Graph the following for a perfectly competitive firm: A graph for short run economic loss for the…

A: In perfect competitive market, there are number of buyers and sellers, selling similar products.…

Q: A perfectly competitive firm is making a loss if

A: We have to find a perfectly competitive firm is making a loss.

Q: Reagan is a farmer and sells her wheat in a perfectly competitive market. Reagan produces 30,000…

A: A perfectly competitive firm in the short run will continue to produce even when the firm is making…

Q: Under Perfect Competition, firms only make normal profit in the long run. Elaborate with grap

A: In the long term, all production components are interchangeable. Free entrance and departure, as…

Q: Hi there. Can you plesse assist with the following question below Explain, with the aid of a graph,…

A: A perfectly competitive firm maximizes profit by producing output at a level where price equals…

Q: Hi there can you please help me to answer the following question 1. Explain, with the aid of a…

A: A perfectly competitive firm can either earn profit or incur a loss. The firm incurs two types of…

Q: Goldbar is an energy bar firm selling in a perfectly competitive market but are considering the…

A: Perfect competitive market: It refers to the market under which various firms are selling goods and…

Question

Graph using MC and MR curves for a firm operating in a short-run perfect
competition market to make an "excessive profit".

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Explain the condition when an imperfectly competitive firm earns an abnormal profit with the help of graph
Tomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which sell for $30 a bushel. At this level of output, the marginal cost is $30 a bushel, average variable cost is $30.50 a bushel, and average total cost is $34.50 a bushel. Should the firm increase output, decrease output, or not produce? Explain.
Galaxy is a firm in perfectly competitive market. Galaxy currently produces and sells 400 units of toys. Its total revenue is $4,000; the marginal cost of producing the last toy is $12; and the average total cost of producing the the last toy is $8. Is the Galaxy maximizing its profit, or should it increase or decrease output in order to increase its profit? Explain to get full credit.
Under Perfect Competition, firms only make normal profit in the long run. Elaborate with graph
(c) Should a firm shut down and why if its revenue is R=$ 1, 000. Its variable cost VC=$ 500 and its sunk fixed cost is F= $ 600. Its variable cost VC=$ 1, 500 and its sunk fixed cost is F= $ 500.
True/False Under perfect competition, firms profit in the long run will be abnormal profits.
Refer to the diagram. To maximize profits or minimize losses, this firm should produce L units and charge price LK. E units and charge price A. M units and charge price N. E units and charge price C.
Discuss the long-run benefits of running a firm in perfect competition.
Using the figure above, what is profit/loss for the firm?
Refer to the above diagram. This profit maximizing firm will: A) An economic profit of AJHB B) An economic loss of BHGC C) An economic profit of AJGC D) an economic profit of AJEO
In perfect competition, Q=50, AVC=50 and AFC=40. Calculate the profit at P=100. (10p) (Q: quantity, AVC: average variable cost, AFC: average fixed cost, P:price)
Basti’s Coffee operates in a competitive market. The short run price in the coffee market is equal toBasti’s Coffee average variable cost. Using two correctly labeled graphs show the coffee market side by side with Basti’s Coffee. Show the long run adjustments in eachof the following:i. price and quantity in the coffee market ii. price and quantity for Basti’s Coffee