How will the marginal and average cost curves of the typical pure competitor shift or change as a result of the following events: (a) an increase in wages of all labor; (b) an increase in the rental payments on office machinery; (c) a technological advance; (d) an increase in property taxes; and (f) a decline in the price of a basic raw material?

How will the marginal and average cost curves of the typical pure competitor shift or change as a result of the following events: (a) an increase in wages of all labor; (b) an increase in the rental payments on office machinery; (c) a technological advance; (d) an increase in property taxes; and (f) a decline in the price of a basic raw material?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 19P

See similar textbooks

Similar questions

Is this a good example of a sunk cost? Why or why not? “As an entrepreneur, advertising your product correctly is the most crucial thing. As I started my small business at the beginning of the year 2019, I had put around $400 in ads through Instagram and Facebook but wasn’t getting results. I had a low engagement, few clicks, and no sales during the start of my business. “
an American multinational that sells consumer electronic products, has manufacturing facilities in three countries: Brazil, Thailand, and Canada. The average hourly wage rate, output per worker, and annual overhead cost for each location are as follows: Given the above figures, is Storm currently allocating its production resources optimally? If not, what should it do? Justify your answer. Now, suppose that Storm is planning to consolidate all its manufacturing into one facility. Where should it locate? Justify your answer.
Eccles Incorporated (based in Ogden) manufactures precision steel sprockets for applications including transportation, defense, logistics and sporting goods. The total cost curve for Eccles Incorporated sprockets is given by Total Cost = 15, 600 + 0.5Q + 0.025Q^2, where Q is the number of sprockets Eccles Incorporated manufactures in a month. The Eccles Incorporated marginal cost curve is given by Marginal Cost = 0.5 + 0.05Q. (b) If there are 10 identical sprocket manufacturers in the United States, what is the market- level supply curve?
Q3) At its best possible output level, a firm has total revenue of Rs. 7000 per day and total cost of Rs. 14000 per day. What should this firm do in the short run if: i) The firm has total fixed cost of Rs. 6000 per day?ii) The firm has total variable cost of Rs. 6000 per day?
In merging with Copa, WestJet sought to acquire an advantage from operating with economies of scale. Discuss the ways this merger may have caused WestJet to suffer from internal diseconomies of scale.
The table below reflects the short run costs of production of a manufacturer of stationery.Complete the table by writing out the letters A to E in your answer book along with the correctlycalculated cost applicable to each letter
Which cost concept is used to determine the level of output at which a firm neither makes a profit nor incurs a loss? a) Sunk cost b) Break-even point c) Opportunity cost d) Variable cost
T/F The fixed cost remains same at all level of output.
In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shut-down price for a hypothetical business in a perfectly competitive market, and determine if that business would incur an economic profit at various market prices, and should the firm continue to produce at each of those price levels. Questions Table 2.a. shows an LED light bulb manufacturer’s total cost of producing LED light bulbs. Table 2.a. Cases of LED light bulbs produced in an hour Total Cost 0 $4,500 10 $4,900 20 $5,100 30 $5,300 40 $5,400 50 $5,700 60 $6,700 70 $7,900 80 $9,700 90 $11,800 1. What is this manufacturer’s fixed cost? Explain why. 2. Assuming that you only know…
A company is planning to manufactureand market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly demand of 200 toasters at a price of $16 per toaster and a weekly demandof 300 toasters at a price of $14 per toaster. The financial department estimates that weekly fixed costs will be $1,400and variable costs (cost per unit) will be $4. a)Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b)Using your knowledge from Finite Math, determine the Revenue functionin terms of ?. c)Determine the Marginal Revenu eat 2 different production levelsfor example 350 and 600 units. Interpret these results.(HINT: Consider what a positive or negative first derivative implies) d)Assume that the cost function is linear. Use the financialdepartment’s estimates to express the cost…
Suppose there are 5 firms in this industry, each of which has the cost curves previously shown.
where is the explanation of the new optimal profit if total costs rise to $353?