What is meant by zero economic profit? If a firm earns zero economic profit in long run does it violate the profit maximizing behaviour of a firm in long run as if there is no profit then there is no point of production?

Q: Use the graph to answer the question Between points C and D, the long-run average total cost curve…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 1. Suppose the price determined by the market is 18. Assume a perfectly competitive industry. Show…

A: A market is the collection of buyers and sellers. There are different forms of markets based on…

Q: Graph represents the cost structure of an individual firm in a perfectly competitive market.  If…

A: The perfectly competitive is the type of market structure where there are large number of buyers and…

Q: Suppose there is a decrease in the demand for high-definition televisions.   What effect might this…

A: The demand curve shifts when there is a change in other factors other than price of commodity. If…

Q: A firm is producing the profit-maximizing amount of output when it is producing where its curve…

A: The total cost is the sum of fixed cost and variable cost. The fixed cost is the cost of fixed…

Q: Explain in detail why it would be okay for you, if you were a business in a purely competitive…

A: After analyzing different types of market forms, it can be seen that the widespread form of market…

Q: the graph, which statement is TRUE? 30 25 20 15 10 7.5 10 125 15 175 Quartity O The flatter long-run…

A: Supply curve is more price elastic in the long run.  Hence, supply curve is flat in the long run and…

Q: a. What is the firm's profit-maximizing output level? units What price will the firm charge? $ b.…

A: Given the diagram  Marginal cost (MC)  Average variable cost (AVC)  Average total cost (ATC)

Q: 4. At the current market price, producing the quantity that maximizes profit would result in a loss…

A: A firm produces if the loss is less than the fixed cost in the short run otherwise shutdown to…

Q: 4) Why will a firm never plan to supply an output at which it has increasing returns to scale?

A: An increasing return to scale refers to the scale that occurs when the output rises by a larger…

Q: f a competitive firm finds that its average variable cost is decreasing at its current profit…

A: A competitive firm is a firm that doing business in that market where the large number of buyers and…

Q: 4. A puppet maker calculates that the yearly cost of running his manufactory is $14,000.…

A: “Hello, since there are multiple ubpart questions posted, we will answer first three subpart…

Q: This company wants to maximize its profit in the short run. How much is a profit-maximizing quantity…

A: Costs are the expenses that firms incur in the production of goods and services. Revenue is the…

Q: Assume now that the costs of shipping are so large that Australian consumers can buy hand sanitizers…

A: Monopoly is a market condition where there is a single seller. It sells a unique commodity in the…

Q: Why is the marginal revenue of a perfectly competitive firm equal to the market price? b. Would a…

A: a) A firm in a perfectly competitive market takes the market price as given and decides the quantity…

Q: A perfectly competitive firm's demand curve is perfectly elastic at the market-determined price.…

A: Given  The statement is A perfectly competitive firm's demand curve is perfectly elastic at the…

Q: 26. Which of the following statements about profit maximization is true? a. It is something that all…

A: Profits = Total Revenue - Total Cost

Q: 1.  What is the difference between accounting profit and economic profit? How could a firm…

A: As there are multiple questions, only the first question would be answered. To get answers of the…

Q: 6. Using the costs in the table above (question #4), what quantity should the firm produce at the…

A: Answer -

Q: In a perfectly competitive market if the quantity produced by a firm is less than the optimal amount…

A: The price is decided by the market forces of demand and supply. The firm is price taker only. P=MC…

Q: 4 In the market for running shoes, all the firms face a similar demand curve and have similar cost…

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Q: 5. Profit maximization and shutting down in the short run Suppose that the market for wind…

A: The optimal quantity of an output that produces by the firm is at where the price is equal to…

Q: 3. A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The…

A: Total cost function is given to be as:-TC = a + bQ² We have the case of a perfectly competitive…

Q: 1.4) Suppose market price is RM60. How much will the firm produce in the short run? How much are…

A: Profit maximizing output is where marginal revenue is equal to marginal cost. Profit = Total revenue…

Q: 3. The figure below shows the market for bread in the short-run and in the long-run. The horizontal…

A: In long run firm always earn normal profit means total revenue is always equals to total cost. In…

Q: (Short-Run Loss) Suppose a firm decides to shut down in the short run. What is the resulting loss?

A: When the price level is charged below the average variable cost, the firm forced to shut down. At…

Q: Calculate the marginal cost, marginal revenue and profit for each unit of production.  ii. How many…

A: MC = TCn -TCn-1    Profit = TR - TC

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ? Draw a graph and…

A: Since you posted multiple questions, we will provide you the answer of first question. If you want…

Q: With the aid of a diagram, explain the profit maximising rule and explain four reasons why firms aim…

A: Profit maximization is a rule in economics where marginal cost (MC) is equal to marginal revenue…

Q: 12. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable…

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Q: 1. Explain the relationship between price, marginal revenue and average revenue for a perfectly…

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Q: 11. The graph below shows the marginal revenue, marginal cost, and average total cost at different…

A: Prices are given for a perfectly competitive firm, and it could earn positive or negative profits…

Q: 1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in the long run…

A: Average revenue (AR): - it is the per-unit revenue generated by selling goods or services which is…

Q: .Suppose a demand for good produced by a certain industry changes then answer the following…

A: The equilibrium price and quantity of a good are determined by the forces of demand and supply. The…

Q: Question 1 a. Draw the marginal cost and average total cost curves for a typical firm.  Explain why…

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Q: Assume that the firm’s minimum average variable cost is £6.5. Should the firm continueoperating in…

A: Short run is a period of time in economics where both fixed factor as well as variable factor exist…

Q: Suppose that the market for candles is a competitive market. The following graph shows the daily…

A: Profit Maximization is defined as a process taken up by the firms to make sure that the best output…

Q: Very briefly, what is the significance of where marginal cost equals marginal revenue? B. When…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: 5) Why is a firm willing to produce at a loss in the short run if the loss is no greater than the…

A: Costs refers to the amount of money involved in the production process to produce the goods and…

Q: 4 In the market for running shoes, all the firms face a similar demand curve and have similar cost…

A: g. The relation between the shoe price and the output is indirect which implies that a rise in the…

Q: (b) Suppose that the price at which Sophie can sell readymade dress is $25 per dress: i. In the…

A: Shutdown point for a firm corresponds to the production point where the average revenue from…

Q: 5. Profit maximization and shutting down in the short run Suppose that the market for frying pans is…

A: Businesses in a competitive market base their operations on customer demand and cost structures.…

Q: the firm under Perfect Competition continues production in the short run even if the firm incurs…

A: Under the perfect competition, firms are price takers. The price of goods and services determined by…

Q: Consider the competitive market for steel. Assume that, regardless of how many firms are in the…

A: All answers given below,

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?