HW #7 Perfect Competition 1. What are the characteristics of a PC firm? 2. Using Hot Dogs, Graph both the market and the individual supply, demand, and costs for Hot Dogs. The 2 graphs have to be side by side. Make sure to include the S. R. and L. R profits please DRAW THE GRAPHS WITH ALL THE LABELS AND NUMBERS PLEASE DRAW THE GRAPHS

HW #7 Perfect Competition 1. What are the characteristics of a PC firm? 2. Using Hot Dogs, Graph both the market and the individual supply, demand, and costs for Hot Dogs. The 2 graphs have to be side by side. Make sure to include the S. R. and L. R profits please DRAW THE GRAPHS WITH ALL THE LABELS AND NUMBERS PLEASE DRAW THE GRAPHS

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 4PA

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1. Identify and explain the logic of the profit maximizing rule for pure competition. 2. Explain in detail the logic of why and how firms enter and exit in purely competitive industries.
15 Explain why perfect competition is not compatible with firms having increasing returns to scale production (IRS) technologies (Hint: draw the demand curve, declining AC and constant MC and analyze profit maximization of perfectly competitive firm)
Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…
Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…
1. Explain the three possible profit maximizing positions of perfectly competitive firms in the short-run. with diagrams
Question Calculate MC, AVC, and total fixed costs for the data below: Output Total Cost 0 20 1 25 2 30 3 35 4 40 5 45 6 50 7 55 8 60 Sketch the MC and the AVCcurves. Given that each output is sold at $8.5, calculate Average Revenue, Marginal Revenue, and profit
2. Now draw a firm operating under perfect competition that is losing money but should still stay open in the short run. (Again, show both the firm and the industry graphs)a. What happens over-time, if many firms are suffering economic losses?b. Is this good or bad for consumers? Explain.
1. Name the four market structures and the industry characteristics that determine them. 2. Why do you think a firm in a perfectly competitive industry does not have market power?
1. Which of the following represents the firm's short-run condition for shutting down? a. shut down if TR < TC b. shut down if TR < FC c. shut down if P < ATC d. shut down if TR < VC
Under the assumption of perfect competition in short run firms onlye earnabnormal profit. True/False. Explain your answer theoretically and graphically
3. What is the meaning of 'acceptable loss' for a perfectiý competitive firm ? Draw a graph and explain.
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