0020Price and Cost ($)(Figure: Unicycle Production Costs) If the current price is $20 in this perfectly competitive industry, we should expect'in the long run (hint: See PowerPoint slides 51 and 53):ATCMCAVCAFC40 42 4446O A. the presence of an economic profit to attract new firms to the industry.O B. that there will be no change in the number of firms in the industry.O C. the presence of a normal profit.O D. the presence of an economic loss to persuade some firms to leave the industry.A Moving to another question will save this response.Question 8 of 11MacBook ProDDF7F3F4F8F9F10#$2delete5.RHC.B.|commandcommandoption

A perfect competitive firm is a price taker and can sell any quantity of the commodity at given…

igure: Unicycle Production Costs) If the current price is $20 in this perfectly competitive industry, w ATC MC AVC 20 18 17 16 AFC 40 42 44 46 Output A. the presence of an economic profit to attract new firms to the industry. B. that there will be no change in the number of firms in the industry. C. the presence of a normal profit. D. the presence of an economic loss to persuade some firms to leave the industry. Price and Cost ($)

igure: Unicycle Production Costs) If the current price is $20 in this perfectly competitive industry, w ATC MC AVC 20 18 17 16 AFC 40 42 44 46 Output A. the presence of an economic profit to attract new firms to the industry. B. that there will be no change in the number of firms in the industry. C. the presence of a normal profit. D. the presence of an economic loss to persuade some firms to leave the industry. Price and Cost ($)

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Perefect Competition

Section: Chapter Questions

Problem 12SQP

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Similar questions

Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
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If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?