The total profit eamed by this firm is S This firm will "shut down" or "continue" The long run market price should be according to the graph above.
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- (Table: Costs for Alina's Apple Pies) Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $38, what profit (or loss) will this firm earn? a profit of $200 a loss of $30 T a loss of $200 a profit of $80 This is what I think the answerisA firm in a competitive market has the following cost structure: Output Total Cost 0 $5 1 $10 2 $12 3 $15 4 $24 5 $40 This is a multiple-choice question, it asked 'If the market price is $4, what will this firm do?'. I answered 'It will shut down in the short run and exit in the long run.' but the correct answer is 'It will produce 3 units in the short run and exit in the long run.' I do not understand how they got that answer by looking at the cost structure. Thank you for your time!This is related to a competitive market player (company): Please refer to the figure above. The competitive market player will produce ____ units of output. A)0 B)45 C)90 D)100
- Case A: Jackie Brown Company.Suppose you are the economic advisor of Jackie Brown Company, a perfectly competitive company 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 change production technology in the short run. You are asked to decide whether the company should shut down its operations or to continue to operate at a loss. Jackie Brown is selling 50 units of output per day, at a price of $20 per unit. The cost of raw material, direct labor, energy, and other variable inputs is about $24000 monthly. Unfortunately, an estimate of Jackie Brown fixed costs is currently unavailable.So, what is your decision? Justify your answer.Case D: Apex Company. Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10 Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250 Answer the following questions: What is the profit-maximizing level of output? Calculate Apex’s profit. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? Comment on your answers to parts (2) and (3).If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market? Include a detailed set of graphs showing both the market and firm long run equilibration in reaction to the change. (Use of ai bot IS strictly prohibited. )
- Adidas is one of the high-class sports shoe dealers in Melbourne with the following short run cost curves. Answer the question that follow Graph""" Calculate this firm’s profit or loss for Adidas shoe company.?a. A firm operating in a perfectly competitive market is earning K20 million economic profits. What is the firms accounting profits if the opportunity cost is K30 millionb. What will be the firm’s economic profits in the long run? c. Company ‘A’ has been recording accounting profits averaging K50 million by investing in project C. It could earn K60 million and K70 million in projects D and E, respectively. What is the company’s current economic profit? d. Advise management what to do in the long run e. Project ‘B’ has a net present value of zero after applying a discount rate of 10%, which is the risk adjusted required rate of return that takes into account the riskiness of the project. What return is earned on this project f. After a risk assessment, it is discovered that project ‘B’ has become more risky and the risk adjusted required return to use must be 12%. Will the net present value of project ‘B’ still remain zero?A company in a purely competitive market has a short run total cost function given by TC = 50 + 4Q + 1.5 Q2. The unit price of the company’s product is Br. 13. A economist working on the efficiency of the company suggested that it has better shut down the business. Do you agree? Explain.
- Many films in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?The value of marginal revenue is $35 and the value of marginal cost is $30 Is the firm maximizing profits?Case D: Apex Company. Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10 Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250 Answer the following questions: If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? Comment on your answers to parts (1) and (2).
