purely competitive firm currently producing 35 units of output earns marginal revenues of $40 from each extra unit of output it sells. If it sells 40 units, then its total revenues would be $1,400. $1,200. $200. indeterminate based on the information given.
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- 40) A perfectly competitive firm will earn ________ economic profits in the range of output for which the firm's price is above its minimum average total cost. A) positive B) negative C) zero D) Any of the above answers could be correct. 41) If a perfectly competitive firm's average total cost curve is below its demand schedule at any level of output, then the firm will earn ________ profits. A) positive B) breakeven C) negative D) zero 42) A perfectly competitive firm ________ at the level of output where P = ATC. A) earns an economic profit B) suffers an economic loss C) breaks even D) shuts down 43) If P = MC and MC ATC, then a perfectly competitive firm will earn ________ profits. A) positive B) zero C) negative D) break-even 44) If a perfectly competitive firm is currently producing where P = MC and MC = ATC, then the firm will earn ________ profits. A) positive B) zero C) negative D) above normal 45) If…Suppose you are the economic advisor of Jackie Brown Company, a perfectly competitivecompany that is suffering economic losses due to unforeseen continuous drop in the market price.Jackie Brown is a price taker; hence it cannot influence the market price, nor could it changeproduction technology in the short run. You are asked to decide whether the company should shutdown its operations or to continue to operate at a loss. Jackie Brown is selling 50 units of outputper day, at a price of $20 per unit. The cost of raw material, direct labor, energy, and othervariable inputs is about $24000 monthly. Unfortunately, an estimate of Jackie Brown fixed costs iscurrently unavailable. So, what is your decision?Exercise 2: A perfectly competitive firm has cost function: AVC = 2Q + 4 (P: $, Q: kg). When the market price is 24$, the firm incurred a loss of 150$. 41. Supply function of this firm in short-run is 42. Fixed cost of this firm is 43. Break-even quantity of this firm is 44. Break-even price of this firm is 45. Shut-down price of this firm is 46. When the market price is 50$, the optimal quantity of this firm is 47. (Continue question 46) The maximum profit of this firm is 48. (Continue question 46) Producer surplus of this firm is 49. When the market price is 30$, the profit of this firm is 50. When the market price is 3$, the firm should Continue producing Stop producing Expand output None of the above
- A perfectly competitive firm's marginal cost function is MC = 30 + 3q. The firm's short-run supply curve is O A. q = 30 + 3P. OB. q - 30 + 3P. OC. q = 10 + 0.33P. O D. q= 10 +0.33P.Managers of perfectly competitive firms must be cautious when deciding to permanently expand (or contract) the scale of production. What factors should go into the decision to expand the scale of production if the market price of your product increases? (select all that apply) A. Whether your product has a complement in consumption B. If the scale expansion is appropriate and not in excess C. If other firms are likely to enter the market D. Whether the price change is temporary or permanentA perfectly competitive firm is hiring variable resources m and n. It will minimize total costs when A. MRPm/MFCm = MRPn/MFCn. B. MRPm ∗ MFCn = MRPn ∗ MFCm. C. Pm/MPm = Pn/MPn. D. MPm/Pm = MPn/Pn.
- The fact that a purely competitive firm’s totalrevenue curve is linear and upsloping to the right impliesthat: A. product price increases as outputincreases. B. product price decreases as outputincreases. C. product price is constant al all levels ofoutput. D. marginal revenue declines as more output isproduced.Farmer Sam is supplying corns in a perfectly competitive market. In Year 1 he sells 3000 tons of corns at a price of $150 per ton. In Year 2 he sells 3600 tons at $200 per ton. In Year 2, his average revenue is ________ and her marginal revenue is ________. A) $20; $18B) $150; $200C) $200; $200D) $150; $150A perfectly competitive firm currently sells each unit of output at $3 and faces an average total cost of $5 at optimal output. What should the firm do? 1) Exit the industry as it is making a loss. 2) Continue to produce at the current output. 3) Continue to produce but reduce output. 4) Not possible to tell.
- Show that under perfect competition, profit maximization implies that firm’s demand for factor inputs are downward slopping and firm’s supply curve in the output market is positively sloping.Please no written by hand solutions 7If SRTC 200+2q+4qwhere q is output, the firm's short-run supply function is a.P = 2 + 8q for P >= 2 and zero otherwise b. q = 0 P < 2; 0.125P - 0.25 P >= 2 c.P = 2 + 8a for p > 0 and zero otherwise. d.q = 0 P < 0; 0.125P - 0.25 P >= 0 8 Each firm in a perfectly competitive market has long-run average total cost represented as ATC+100/q. Long-run marginal cost is MC = 200q - 10 The market demand is O^ prime =215 dot 0 * 5P . At the long-run equilibrium price, how many firms are in the market? a= 500 b. n = 1000 c. n = 1200 d.n-2000 e.n = 2400Assume the following total cost schedule for a perfectly competitive firm. Output TVC TFC 0 0 100 1 40 100 2 70 100 3 120 100 4 180 100 5 250 100 6 330 100 The total cost of producing 6 units of output is __________________ If the firm is producing at an output level of 2 units, the ATC is _____________ and the AVC is ______________ The profit-maximizing firm would shut down in the short run if the market price of its output dropped below ___________________ At what price would a profit-maximizing firm earn zero economic profits? _______________
