If the government imposed a licensing fee that increased the fixed cost for all firms in the market, we would expect long run equilibrium output per firm to [Select] of firms to [Select] 2 and the equilibrium number
Q: 5) Given the data in the below table, income of $13, a price of $1 for a gallon of gasoline and…
A: Utility is the satisfaction that a consumer obtains after consumption of goods and service. It is…
Q: We would optimally institute command-and-control policies if a pollutant was O highly damaging. O…
A: Environmental regulation commonly employs command-and-control policies, which entail direct…
Q: Macroeconomics is the study of a. the behavior of large firms in the marketplace b.…
A: Macroeconomics is the study of the structure, performance, behavior, and decision-making of the…
Q: Realizing that there is a great potential for increased tax revenue, government officials in…
A: Perfect competition is a market structure in economics characterized by a large number of buyers and…
Q: Suppose that you own a house. What is the opportunity cost of living in the house? The opportunity…
A: The opportunity cost is the next alternate which is given up. The opportunity cost is opportunity…
Q: Based on the market for chicken depicted in the graph below, which of the following is true? D₁ Do O…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: Question 20) The shortages created by rent controls is largest when demand by tenants is_____ and…
A: ElasticityElasticity in economics is explained as a measure of the sensitivity of an economic…
Q: In optimization we convert a problem to which calculus problem? Group of answer choices a. Find an…
A: The issue is one of mathematical optimization, particularly as it pertains to calculus. It entails…
Q: Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both,…
A: Money basically refers to anything that can be used as a common medium for the exchange of goods or…
Q: Which of the following are examples of automatic stabilizers? Check all that apply. Personal income…
A: Automatic stabilizers:Automatic stabilizers are the tools that any government uses to fix its…
Q: Determine the quantity of output that generates the maximum profit. Use the green points (triangle…
A: The profit of a firm is the revenue generated from its business. It includes the explicit and…
Q: Economists suggest that due to incentive effects, a more equally shared pie will usually be A.…
A: Economic redistribution refers to the transfer of income, wealth, or resources from some individuals…
Q: Graphically, the effects of an external benefit can be shown as OA. a leftward shift of the market…
A: The quantity of an item or service that consumers are willing and able to buy at different prices…
Q: Use the following table showing the marginal utility schedules for product X and product Y for an…
A: “Since you have posted multiple questions, we will provide the solution only to the specified…
Q: Which process line should be built for a new chemical? The expected market for the chemical is 20…
A: The concept of present worth is widely used in various financial and investment analyses, including…
Q: Which of the following is not a reason why the division of labor could increase output? Select the…
A: The economic theory of division of labor suggests that dividing the production process into…
Q: The interpretation of the slope coefficient in the model in (Y) = Po +P₁n (Xi) +μ; is as follows:…
A: The issue you presented has to do with regression analysis and econometrics. It specifically entails…
Q: 4) Consider the two diagrams below. First diagram represents a typical firm in a purely competitive…
A: Perfect competition is a market structure in economics characterized by a large number of buyers and…
Q: short-run aggregate supply. Which of the following best illustrates cost-push inflation? OA. A…
A: A complicated economic issue, inflation affects people and the economy in many ways. Maintaining a…
Q: ove figure shows the reaction functions for two pizza shops in a small isolated town. Identify the…
A: Cournot oligopoly Model assumes that there are two firms in market and these firms compete on basis…
Q: Suppose the government grants an individual or company the exclusive right to intellectual property.…
A: Intellectual property rights come in various forms, primarily including copyrights and…
Q: Suppose that Omar's marginal utility for each additional cup of coffee is 1.5 utils per cup no…
A: A consumer will maximize the utility when the law of equi-marginal utility is satisfied and when the…
Q: 19) OUTPUT OF MOPS D PP1 PP2 OUTPUT OF BROOMS Figure 1.3 In Figure 1.3, a shift of the production…
A: Production possibility frontier (PPF):Production possibility frontier (PPF) is the graphical…
Q: If the U.S. economy is currently at point K, which of the following could cause it to move to point…
A: Gross Domestic Product (GDP) is a significant economic indicator that represents the total monetary…
Q: At which point is the unemployment rate equal to the natural rate of unemployment? OA. A OB. B о с.…
A: The Phillips curve depicts relationship between inflation rate and unemployment rate. There is trade…
Q: Raising taxes shifts the curve to the A. short-run aggregate supply; left B. aggregate demand; right…
A: Aggregate demand is the sum of consumption, investment, government spending and net export.This…
Q: 6) The only variable input a janitorial service uses to clean offices is workers who are paid a…
A: The variable input for the janitorial services is paid with wage w. The wages for every hour is…
Q: 4 Other things being equal, the elasticity of demand for labor will be greater the Multiple Choice O…
A: The elasticity of demand:The elasticity of demand refers to the changes in the demand when the…
Q: Most markets in the United States: have some degree of competitiveness but are not perfectly…
A: Perfect competition serves as a benchmark for understanding the efficiency of market outcomes. In…
Q: The purpose of the disclosure requirements of the Securities and Exchange Commission to protect…
A: It can be defined as a concept that shows how much currency of one nation is valuable in terms of…
Q: 7. Economic costs and benefits of a common currency Identify whether each attribute in the following…
A: A common currency is a largely accepted currency between two or more countries engaged in…
Q: Produce a college expense sheet that summarizes the expenses provided below. To complete the…
A: An expense is a financial outflow or the depletion of assets, usually in the form of cash or other…
Q: 1. Suppose a firm faces a fixed price of output, p = 1200. The firm hires workers from a union at a…
A: The Labor Demand Function shows how the need for workers depends on different factors. These…
Q: 1. Definition of economic costs Lorenzo lives in Miami and runs a business that sells pianos. In an…
A: Explicit cost- Explicit business costs include all transactions relating to production factors used…
Q: In the IS curve, I, is given by. OY,/T, OY,-T, Ο Y,xY, O (Y,-F,)/T, O (F-Y)/T, where Y is current…
A: IS curve represents the relationship between current output and potential output, showing the output…
Q: Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity…
A: The level of impact the price of a good has on its quantity demanded is referred to as the price…
Q: 6. How will the following events affect equilibrium price and quantity for the product highlighted…
A: The equilibrium price is the only price where the plans of consumers and the plans of producers…
Q: Discuss and explain the economic growth based on trade model.
A: The objective of this question is to understand the concept of economic growth based on the trade…
Q: In our discussion of labor market pooling, we stressed the advantages of having two firms in the…
A: Labor market pooling, also known as labor pooling, is a situation in which numerous employers or…
Q: Use the figure below to answer the following question. $5 Price (per pound) 2 Saved 0 2 468 10 12 14…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: Which two programs, taken together, constitute the largest share of federal expenditure in the U.S.…
A: National Budget refers to the estimate of total receipt and total expenditure of a nation.It…
Q: Transfer payments are not included in GDP calculation because these are OA. no different from income…
A: A transfer payment is a payment made by the government or another entity to an individual or…
Q: Assume the economy can produce either sports utility vehicles (SUVS) or minivans. The graph below…
A: The production possibility frontier refers to the many combinations of commodities and services that…
Q: Question 12 Exhibit 2-7 Production possibilities curve 400 300 Cars (millions per year) 200 100 0 A…
A: The production possibility frontier provides consumers with different combinations of goods that can…
Q: In the figure above, if the firm is regulated using an average cost pricing rule, the firm avoids an…
A: Monopoly is a form of imperfect competition. There is one firm. The number of consumers is high.…
Q: 6. With these same equations: C = 220 +0,76rd, I = 440₁ 6=270-dosk X=530, M=535, and T = U+01127
A: The equation for equilibrium is as follows:Given the provided equations:
Q: According to the quantity theory of money, when velocity is constant, if output is higher real…
A: The QTM is given by the equation When V remains unchanged, any change in M will have a direct…
Q: What impact will budget deficits have on the exchange rate value of the dollar? The dollar will…
A: Budget deficits occur when a government spends more money than it collects in revenue during a…
Q: What does the benefit of division of labor that comes from intra-industry foster and lead to? O…
A: The division of labor, a concept introduced by the economist Adam Smith in his seminal work "The…
Q: Draw the compensated (hicksian) and uncompensated (marshallian) demand curves when: a) both normal…
A: The relationship between the cost of an item or service and the quantity desired over a specific…
Trending now
This is a popular solution!
Step by step
Solved in 7 steps
- The coffee industry is comprised of many firms producing an identical product. Market demand and supply conditions are indicated in the left-hand panel of the figure below; the long-run cost curves of a representative coffee farmer are shown in the right-hand Currently, the market price for coffee is $2 per pound, and at that price consumers are purchasing 800,000 pounds of coffee per day. Using the graphs shown in the images find:a. How many pounds of coffee will each farmer produce if they want to maximize profits?b. How many farmers are currently serving the industry (fractional numbers are fine)?c. In the long run, what will the equilibrium price of coffee be? Briefly explain your answer.The two side by side graphs are for two firms that between them supply all the original grown advocados for a local area. With vigorous competition between the firms, the price per pound has settled at a point where both firms are just breaking even. For each firm, the marginal cost (mc) average variable cost (avc) and average total (atc) curves are shown In the blank graph below, use the straight line tool to draw a straight line representing the short run market supply curve for quantities above zero. (that is Dont worry about operating points for which the quantity is zero)Assume that prior to the outbreak of the coronavirus (Covid-19), the natural gas industry was in Long Run Equilibrium (LRE). Using our side-by-side graph, depict the market equilibrium P0 and Q0, the optimal output of an individual firm representative of the other firms in the industry at this LRE (labeled as q0), and the individual firm’s profit if any. Provide a brief narrative explaining the setting and the profitability of an individual firm in an LRE (including why there is a certain level of profit in this setting). assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC curves. market price is always greater than the minimum of the AVC curve.
- Suppose there are 1,000 hot pretzel stands operating in New York City. Each stand has the usual U-shaped average-total-cost curve. The market demand curve for pretzels slopes downward and the market for pretzels is in long-run competitive equilibrium. Draw the current equilibrium, using graphs for the entire market and for an individual pretzel stand. Now the city decides to restrict the number of pretzel-stand licenses, reducing the number of stands to only 800. What effect will this action have on the market and on an individual stand that is still operating? Use graphs to illustrate your answer. Suppose that the city decides to charge a license fee for the 800 licenses. How will this affect the number of pretzels sold by an individual stand, and the stand’s profit? The city wants to raise as much revenue as possible and also wants to ensure that 800 pretzel stands remain in the city. By how much should the city increase the license fee? Show the answer on your graph.Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. The shapes of long-run cost curves follow directly from the assumption of a fixed factor of production, which implies diminishing returns. The optimal scale of plant is the scale of plant that maximizes average cost. In the long-run competitive equilibrium, each individual firm chooses a scale of operations that minimizes its long-run average cost. Answer correctly and explain within 30mins will give you positive feedback.Suppose you are the economic advisor of Jackie Brown Company, a perfectly competitivecompany that is suffering economic losses due to unforeseen continuous drop in the market price.Jackie Brown is a price taker; hence it cannot influence the market price, nor could it changeproduction technology in the short run. You are asked to decide whether the company should shutdown its operations or to continue to operate at a loss. Jackie Brown is selling 50 units of outputper day, at a price of $20 per unit. The cost of raw material, direct labor, energy, and othervariable inputs is about $24000 monthly. Unfortunately, an estimate of Jackie Brown fixed costs iscurrently unavailable. So, what is your decision?
- Consider the equilibrium depicted as your final short-run equilibrium (SRE) in Question 3. Is your price depicted in Question 3, P2, a Long Run Equilibrium price for the natural gas industry? If so, explain why. If P2 is not a Long Run Equilibrium price, please explain what changes must take place to return the industry to long run equilibrium. As part of these changes, what, if anything, will happen to the supply curve, market price, the optimal output of an individual firm, the total number of firms in the industry, and the individual firm’s profit? Assume the natural gas industry is still living with the short-run supply disruption. Then unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas. For this analysis, assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC…Suppose you are hired as an economic consultant for Promax Consulting Company. Your job is to advise the company’s clients on the appropriate action to take in the short-run in order to maximize the profits (or minimize the losses) for each firm. The firms you are about to analyze produce different products, and each operates independently in a different perfectly competitive market. You may assume that each is currently operating at an output level where marginal cost is increasing. Fill in the missing information, and make your suggestions about the appropriate action for each firm by placing one of the following symbols in the last row of the table of information that follows: C = currently operating at the correct level of output I = increase the level of output D = decrease the level of output SD = shutdown the plant Firm A…Cannabis has been legalized in many states across the country. This question asks you to consider how the labeling of the product may affect the price, quantity, and efficiency of the market. Suppose cannabis is produced by many small producers, and there is free entry and exit in the market. Furthermore, suppose there is no way to differentiate the product for sellers so buyers view all cannabis as homogenous. Draw the graph for long-run equilibrium for a typical producer, assuming the producer has typical cost curves. Recently, cannabis producers have considered ways to differentiate their product. One idea is to use the wine market as a model, where bottles are often labled not only with their country of origin but also their region and appellation (the region within the region). Assume such labeling would mean consumers would begin to see cannabis producers as differentiated, that is, imperfect substitutes. Draw the graph for long-run equilibrium for a typical producer.…
- If there were 30 firms in this market, the short-run equilibrium price of copper would be______ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would _______ the copper market. Because you know that competitive firms earn_____ economic profit in the long run, you know the long-run equilibrium price must be__________ per pound. From the graph, you can see that this means there will be _______ firms operating in the copper industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. True FalseOutput and Cost Information Output Total Fixed Cost Total Variable Cost 1 $20 $30 2 $20 $70 3 $20 $100 4 $20 $120 5 $20 $180 6 $20 $268 The table above provides information for a firm in a purely competitive industry. The table above provides information for a firm in a purely competitive industry. Every firm in this industry has the same cost structure as above. From what you know about these firms’ cost structures, the highest possible price per unit that could exist as the market price in long-run equilibrium in this industry is $____________.Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions: P = 25000 − 0.2Qd and P = 5000 + 0.3Qs If all current firms in this market have identical cost structures and produce 50 units at their break-even point: Now, assume that the inverse demand for this product increases to P = 35000 − 0.2Qd, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents: a- How many new firms entered this market? b- What is the value of the elasticity of supply at long-run market equilibrium? c- Draw a fully-labeled graph that demonstrated the above changes at the firm and market levels, highlighting the long-run industry supply curve