The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool ? Market for Goods 200 180 10 Quantity Demanded (Units) 160 140 Demand Price (Dollars per unit) 100.00 120 100 80 60 Demand 40 20 0 0 2 6 8 10 12 14 16 18 20 QUANTITY (Units) On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 8, 10, 12, 16, and 20 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the gree points (triangle symbol) to plot the results. (?) 1000 900 Total Revenue 800 700 600 500 400 300 200 100 0 PRICE (Dollars per unit) TOTAL REVENUE (Dollars) 0 2 4 4 6 8 10 12 14 16 QUANTITY (Number of units) 18 20

The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool ? Market for Goods 200 180 10 Quantity Demanded (Units) 160 140 Demand Price (Dollars per unit) 100.00 120 100 80 60 Demand 40 20 0 0 2 6 8 10 12 14 16 18 20 QUANTITY (Units) On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 8, 10, 12, 16, and 20 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the gree points (triangle symbol) to plot the results. (?) 1000 900 Total Revenue 800 700 600 500 400 300 200 100 0 PRICE (Dollars per unit) TOTAL REVENUE (Dollars) 0 2 4 4 6 8 10 12 14 16 QUANTITY (Number of units) 18 20

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 7.15P

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Similar questions

What prevents a perfectly competitive firm from seeking higher profits by increasing the price that it charges?
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?
The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total variable costs are 20 for one aquarium, 25 for two units, 35 for the three units, 50 for four units, and 80 for five units. In the form of a table, calculate total revenue, marginal revenue, total cost, and marginal cost for each output level (one to five units). What is the Profit-maximizing quantity of output? On one diagram, sketch the total revenue and total cost curves. On another diagram, sketch the marginal revenue and marginal cost curves.
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.