MC ATC P. Pa Ps Outputper period Quantity per period Refer to the above figures for a typical firm in a perfectly competitive market. Which of the following describes the long-run equilibrium? A When market demand is at D2, the typical firm produces Q3. В When market demand is at D3, the typical firm produces Q2. C When market demand is at D2, the typical firm produces Q2. D When market demand is at D3, the typical firm produces Q3- %24 %24

MC ATC P. Pa Ps Outputper period Quantity per period Refer to the above figures for a typical firm in a perfectly competitive market. Which of the following describes the long-run equilibrium? A When market demand is at D2, the typical firm produces Q3. В When market demand is at D3, the typical firm produces Q2. C When market demand is at D2, the typical firm produces Q2. D When market demand is at D3, the typical firm produces Q3- %24 %24

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

See similar textbooks

Similar questions

Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?
I need help with econ multiple hw questions asap! 70) Are the decisions to shut down and exit a market short-run or long-run decisions? A. The decision to shut down is a short-run decision, whereas the decision to exit is a long-run decision. B. The decision to shut down and the decision to exit are both long-run decisions. C. The decision to shut down and the decision to exit are both short-run decisions. D. The decision to exit is a short-run decision, whereas the decision to shut down is a long-run decision 69) Refer to the attached Figure 20.1. Why is Q1 not a profit-maximizing level of output? A. at Q1 MR = MC B. at Q1 MC > MR C. at Q1 MR>MC D. at Q1 MR = ATC
ASAP Does the state of mr=mc in a perfect competitive market mean that the firm is supposed to sell out no matter how much marginal cost they put? Because mr=mc occurs only if the product sells out 100% corresponing to the put marginal cost, right? I also know that the state is occured because the price in a competitive market is fixed, but i wondered if the state means also selling out completely.
A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
A company in a competitive market has fixed costs of $200. A total cost curve is given in the table below. Given the data, answer the questions below. Output: 10 20 30 40 50 60 Total Cost:300 420 560 720 900 1100 a. Given the price is $20, what is the profit-maximizing output? What is the profit? b. Given the price is $20, what will happen in the long run? c. At the long-run equilibrium, what will the price be in the long run? What is the profit-maximizing output? What is the profit of the company? d. Prepare marginal cost schedule cost schedule for the firm.
A new korean restaurant opens in a city. People are initially cautious about eating newfood items, until an influential health report warns consumers against korean foodsuggest that they decrease their consumption of Korean foods. As a result, demand forKorean cuisine decreases dramatically.Assuming that the market for Korean food is perfectly competitive, answer thequestions below.a. In the story above, what should have happened to the short-run economic loss of theKorean restaurant as a result of the health report?b. Assuming that demand remains low, what do you anticipate will happen to thenumber of korean restaurants in the city over the long run?c. Would you predict that the first korean restaurant would be able to still running inloss over the long run? Explain your answer.d. Using one graph of the market as a whole and one graph of a representative firm'scost curves, illustrate your answers to parts a - c. (Draw diagram of a, b and c and labelyour diagram).e. Local…
(a) Suppose initially there is a long run equilibrium in a perfeetly competitive market. If suddenly there is a negative demand shock in the market, how the market will adjust to a new long-run equilibrium? Provide adequate graph to supplement your answer.
A market is in long-run equilibrium and firms in this market have identical cost structures suppose demand in this market decreases. Which of the folowing are coreet descriptors of what happens to tho individual firms and the whole market as the market fist leaves and then returns to long-run equilibrium? Instructions: You may select more than one answer cick the box with a check mark for correct answers and dick to empty the box for the wrong answers. 0 Market proe will decrease in the longrun. O Market quantity will remain the same in the long-run. O Individual firms' profit maximizing output will decrease in the long run. O Firms will exit the market inthe long run. O Individual firms' profit maximizing output wil decrease in the shon-nun. O Market quantity decrease in the long run. o Firms win enter into the market in the long run. O Market price wil decrease in the short-run. References eBook & Resources Leaming objective: 13-08 Calculato the Section Responding…
In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut sells for the market price of $0.75 and they sell out every day. Assume that this company has labor costs of $275 and materials costs of $400. a. At what price would this donut shop shutdown in the short run? b. Using only variable costs, what is the donut shop’s daily profit? - Now assume that the owner is thinking of adding a second location downtown. The capital investment required is $4,000. The normal rate of return is 5%. c. If the new shop could operate under the same conditions as the original location is it a good business decision to expand?
What is the shutdown condition? a.A condition stating when a firm should cease to operate and produce nothing, because profits are maximized when not producing b.In the short run, the shut down condition is TR < VC . In the long run, it is TR
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. graphically depict any changes affecting the market for natural gas and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). 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.
A new korean restaurant opens in a city. People are initially cautious about eating newfood items, until an influential health report warns consumers against korean foodsuggest that they decrease their consumption of Korean foods. As a result, demand forKorean cuisine decreases dramatically.Assuming that the market for Korean food is perfectly competitive, answer thequestions below.a. In the story above, what should have happened to the short-run economic loss of theKorean restaurant as a result of the health report?