In the long run, a perfectcly competitive firm will Question 9 options: a) charge a price equal to average total cost b) earn economic profits c) charge a price equal to marginal revenue d) produce where the average total cost curve is at its minimum
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- A purely competitive firm whose goal is to maximize profit will choose to produce the amount of output at which:.4 a. TR and TC are equal. b. TR exceeds TC by as much as possible. c. TC exceeds TR by as much as possible. d. none of the above.Classify the statements based on whether each describes a perfectly (purely) competitive firm earning an economic profit, a firm at zero economic profits, or a firm operating at a loss. Economic Profit Zero Economic Profit Economic Loss Firms incentivized to leave the market Firms incentivized to enter the market P<ATC P>ATC At long-run equilibrium P=ATCA perfectly competitive firm has total revenue and total cost curves given by: TR = 100Q TC = 5,000 + 2Q + 0.2 Q2 Find the profit-maximizing output for this firm. What profit does the firm make?
- Assume the industry for flour tortillas in Denver is perfectly competitive. There are 200 firms. Seventy-five of the firms are “high-cost,” with short-run supply curves QHC = 5P. The other 125 are “low-cost,” with short-run supply curves QLC = 8P. Quantities are measured in dozens of tortillas and prices in dollars. Derive the short-run industry supply curve for tortillas QS. Assume the market demand curve for tortillas is given by QD = 10,000 − 625P. Find the market equilibrium price and quantity. At this price, how many dozens of tortillas are produced by the high- and low-cost firms, respectively? Determine total industry producer surplus at the equilibrium. Especially need the producer surplus.In the short run, the best policy for a perfectly competitive firm is to Group of answer choices shut down its operation if price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its operation if price falls between average total cost and average variable cost. a and c none of the aboveIf marginal cost exceeds marginal revenue then the perfectly competitive firm will Question 5 options: a) likely be at a profit maximizing level of output b) should increase the level of production to maximize profit c) should reduce its average fixed cost in an effort to lower its marginal cost d) should decrease production until marginal revenue equals marginal cost
- Consider a profit-maximizing firm in a competitive industry. For each of the following situations, indicate whether the firm should shut down production or produce where MR = MC. a. P < minimum AVC. b. P > minimum ATC. c. Minimum AVC < P < minimum ATC.The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. The price of fertilizer must be equal to average variable cost. The price of fertilizer must be less than marginal cost. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. Average total cost will decrease. The quantity supplied by each firm will decrease. The total quantity supplied to the market will decrease. Marginal cost will decrease. The price of fertilizer will increase.In the short run, a perfectly competitive girl will maximize profits ( minimize losses) by producing the level of quantity at which ( a. MC>MR b. MR=MC c. MR>MC) . The firm will only operate at the lowest per-unit cost if the firm is ( a. Earning an economic profit b. incurring an econmonic profit c. breaking even). And P=MR=MC= (a. Minimum ATC b. Short-run AVC c. short - run AFC)
- In the short run, perfectly (or purely) competitive firms will maximize their profit by producing (select all options that apply): a. a quantity where marginal revenue > marginal cost. b. the quantity where marginal revenue = marginal cost. c. the largest quantity possible, not considering costs or revenues. d. a small quantity to drive up the price. e. the quantity where price equals marginal cost. f. none of the above are correct.A perfectly competitive firm produces good X and has the following weekly cost data. ( Q = total output; TFC = total fixed cost; TVC = total variable cost): Q (units) TFC ($) TVC $ TC ($) ATC $ AVC $ MC $ 0 0 120 1 172 2 219 3 261 4 300 5 342 6 389 7 441 8 499 9 565 10 641 (a) Complete the above table. Round off values to the nearest two decimal places. (b) For each of the following prices determine this firm’s profit- maximising (or loss-minimising) output per week in the short run, and calculate the weekly profit or loss. Show your calculations (to two decimal places). (b.i) $42.50 (b.ii) $47.50…
