PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally,firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughoutall these changes, the industry remains competitive. Graphically show how this new law changes the industry in both theshort run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS,Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new lawis put in place and in the long run. Correctly show how the market will adjust to the new long-run competitiveequilibrium. Clearly show how the long-run equilibrium market quantity and market price

here are the graphs illustrating the changes in the industry due to an increase in fixed costs:…

Answered: PLEASE ANSWER WITH GRAPH: Suppose that…

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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What is the long-run equilibrium for a perfectly competitive market? How do entry and exit affect these? Is this different for increasing and decreasing cost industries than it is for constant cost industries? Be able to graph the market and firm, side-by-side, in the short-run and the long-run
Assume that the gold-mining industry is perfectly competitive. a) Illustrate a long-run equilibrium using diagrams for the gold market and for a representative gold mine. b) Suppose that an increase in jewelry demand induces a surge in the demand for gold. Using your diagrams, show what happens in the short run to the gold market and to each existing gold mine. c) If the demand for gold remains high, what would happen to the price over time? Specifically, would the new long-run equilibrium price be above, below, or equal to the short-run equilibrium price in part b)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Please answer all parts: How does fixed cost affect marginal cost? Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer. Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly.
Discuss the situation facing firms in competitive markets. Why is it said that they are "price takers" and unable to influence the market price? If firms in competitive markets cannot effectively choose the price of their output, what do they decide? What determines the level of output that they produce? Next, think of or research some examples of firms that might decide to shut down in the short run. What do you think would make them choose this course of action? Discuss the industry and firms in it, along with the conditions prompting the potential shutdowns. Could seasonality in demand be a potential factor? Explain. What is the exact price for the product that is referred to as the “shut down” point in the short run? When would a seller possibly decide to exit the industry over the long run? What should product price be compared to when assessing whether there is a profit or loss? Can you think of any examples of declining industries? Explain.
you've been learning about what makes a market perfectly competitive, how a firm in a perfectly competitive market makes profit-maximizing decisions, and how a perfectly competitive market moves towards equilibirium. But how applicable is this to real life? For this discussion, try to think of a market (for a product or service) that is perfectly competitive or very close to it. What characteristics of the market make it like perfect competition? Are there factors that keep it from being perfectly competitive? If so, what are they? How close do you think the firms in this market are to perfectly competitive firms in choosing equilibrium price and quantity?
Suppose that the perfectly competitive market for wheat spaghetti is in long-run equilibrium. Suppose also that campaigns for fighting obesity make students on lots of college campuses in the US aware of the fact that excessive pasta (including spaghetti) consumption has an adverse effect on body weight, and these campaigns provide an incentive for students to restrict spaghetti consumption. How do the campaigns described above affect the market for wheat spaghetti in the US, that is does the supply or the demand curve for wheat spaghetti shift and in what direction? How are the equilibrium price and quantity of wheat spaghetti affected in the short run? What happens to the short-run profit of the typical producer of wheat spaghetti in the US? What will be the price of wheat spaghetti in the long run? What profit will producers of wheat spaghetti make in the long run? Explain how this outcome is achieved. Use two graphs: one showing the market supply and demand curves for wheat…
Suppose the book-printing industry is competitive and begins in a long-runequilibrium.a. Draw a diagram showing the average total cost, marginal cost, marginal revenue,and supply curve of the typical firm in the industry.b. Hi-Tech Printing Company invents a new process that sharply reduces the cost ofprinting books. What happens to Hi-Tech’s profits and to the price of books in theshort run when Hi-Tech’s patent prevents other firms from using the new technology?c. What happens in the long run when the patent expires and other firms are free touse the technology?
Malaysia is the world's largest producer of rubber gloves. The Rubber gloves industry is perceived as a highly competitive industry. Explain in detail how rubber glove manufacturers are able to increase their production in the short-run and long run.
Copy and complete the Table. iv. At what level of output does diminishing returns set in, explain your answer thoroughly. v. Suppose that the price of the firm’s product is GH¢30.00, how much will the firm produce to maximize profit? How much is total profit? vi. Suppose that the price of the firm’s product is now GH¢50.00, how much will the firm produce to maximize profit? How much is total profit? vii. Produce a graph of Total cost, Total fixed cost and Total variable cost (on one graph sheet/excel). viii. Produce a graph of the Average total cost, Average fixed cost, average variable cost, marginal cost (on one graph sheet/excel). ix. Explain the relationship among the total and per unit cost curves.
The table below provides revenue and cost information for a perfectly competitive firm producing computers. Over what output range will this firm incur losses? What is the slope of the total revenue curve? At about how many computers per day do economic profits seem to be at a maximum? Graph the economic model of this firm.
Malaysia is the world's largest producer of rubber gloves. The Rubber gloves industry is perceived as a highly competitive industry. Explain in detail how rubber glove manufacturers are able to increase their production in the short-run. Give youe opinion
Consider the perfectly competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MCMC), average total cost (ATCATC), and average variable cost (AVCAVC) curves shown on the following graph. The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. If there were 20 firms in this market, the short-run equilibrium price of steel would be per ton. At that price, firms in this…

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