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The
A) less than 1.
B) equal to zero.
C) infinite.
D) 1.
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- he price elasticity of demand for any particular perfectly competitive firm's output is.... A. Less than 1. B. Equal to 1. C. Equal to zero . D. Equal to infinite .A firm’s marginal cost is $5. If it charges a price of $20, the price elasticity of demand for the product of this firm is: a. −0.25. b. −0.50. c. −0.75. d. −1.33. e. None of the above.The long-run supply curve of a perfectly competitive industry with increasing costs is: a) Perfectly inelastic b) With positive slope c) Perfectly elastic d) With negative slope
- industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2. The short-run elasticity of market supply is a) 3/10 b) 1/5 c) 2/5 d) none of the aboveBavarian Crystal Works designs and produces crystal wine decanters for export to international markets. The marketing manager of Bavarian Crystal Works estimates the demand curve for each month to be: P=1,000-0.0025Q where Q is the number of wine decanters produced annually. Bavarian Crystal Works also pays a lease for its factory and equipment every month in the amount of $1,000,000. Finally, the cost to produce each wine decanter is $200. What is the marginal revenue at 40,000 units? If Bavarian Crystals is currently producing 40,000 units would you recommend they increase their production?A firm facing a horizontal demand curvea. cannot affect the price it receives for its output.b. always produces at an output at which P = MR.c. faces perfectly elastic demand for its product.d. All of the above are correct.
- A perfectly competitive firm's short−runsupply curve is A. perfectly elastic at the market price. B. upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve. C. upward sloping and is the portion of the marginal cost curve that lies above the average total cost curve. D. horizontal at the minimum average total cost.True/false 1- perfectly competitive firms are sometimes called price takers because they have little or no control over product price. 2- a perfectly competitive firm's horizontal demand curve implies that the firm must lower its price to sell more output.Marginal Revenue, Pricing, and Elasticity Analysis. ( Show your solution) 1. Last year, a toy manufacturer introduced a new toy truck that was a huge success. The company invested $2 million for a plastic injection molding machine and $100,000 in plastic injection molds specifically for the toy. Labor and the cost of materials necessary to make each truck are about $3, the company's total revenue is $6M. This year, a competitor has developed a similar toy that has significantly reduced demand for the toy truck. Now, the original manufacturer is deciding whether they should continue the production of the toy truck. If the estimated demand is 100,000 trucks a. How much does the unit cost? b .what is the break-even price for the toy truck? c. How much is the selling price for the company to earn pure profit? d. Should you shut down, or continue the operation? Justify your answer.
- Question 23 A competitive firm has a total cost function in dollars of the form C(q)= 100–4q + q^2, where q is output. Suppose the market price is $10 per unit of output. What is the firm’s short run point elasticity of supply? a) 20/7 b) 5/7 c) 10/7 d) 0.5 e) 2A firm's faces a constant output price of $5. It produces 37 units and incurs a MC of $3. Which of the following is true? Select all that apply. A. The firm is perfectly competitive because it faces a horizontal straight line demand curve. B. The firm is perfectly competitive because it faces a horizontal straight line Average Revenue graph. C. The firm's marginal revenue is $5. D. The firm's Total Revenue equals $185. E. The firm's Total Cost equals $111.Bavarian Crystal Works designs and produces crystal wine decanters for export to international markets. The marketing manager of Bavarian Crystal Works estimates the demand curve for each month to be: P=1,000-0.0025Q Where Q is the number of wine decanters produced monthly. Bavarian Crystal Works also pays a lease for its factory and equipment every month in the amount of $1,000,000. Finally, the cost to produce each wine decanter is $200. What quantity would maximize profits? What is the optimal price for Bavarian Crystals to charge?