Answer it correctly please. Give reason. I Figure ISuppose that a firm in a perfectly competitive market has the following cost curves:Price13+12110MCATCAVC636.31-1236.9 10 11Deantity(Attention: If you can't see Figure 1. please click here to download and view the image. Thank you.)Refer to Figure 1. If the market price is $5.28, the firm will earnO positive economic profits in the short run.O negative economic profits and shut down.zero economic profits in the short run.O negative economic profits in the short run but remain in business.

A firm in the perfectly competitive firm produces at MC=P if P>min(AVC). min(AVC)=$4.5 so the…

Suppose that a firm in a perfectly competitive market has the following cost curves: 13- 12 11 10 MC ATC AVC 1. 2 3 89 10 11 (Attention: If you can't see Figure 1. please click here to download and view the Refer to Figure 1. If the market price is $5.28, the firm will earn O positive economic profits in the short run. O negative economic profits and shut down. O zero economic profits in the short run. O negative economic profits in the short run but remain in business.

Suppose that a firm in a perfectly competitive market has the following cost curves: 13- 12 11 10 MC ATC AVC 1. 2 3 89 10 11 (Attention: If you can't see Figure 1. please click here to download and view the Refer to Figure 1. If the market price is $5.28, the firm will earn O positive economic profits in the short run. O negative economic profits and shut down. O zero economic profits in the short run. O negative economic profits in the short run but remain in business.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 6E

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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
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