LSC CUMBERLAND EC202 MICRO>PKG<
21st Edition
ISBN: 9781260586992
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 3RQ
To determine
Perfect competition .
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
........
# m
SI
4.
2.
He
%3D
Consider the following costs for a typical perfectly competitive firm with no fixed costs (average total cost = average variable cost).
Average Total
Cost
Quantity
Marginal Cost
$24
1.
16.5
6$
12.67
3.
7.
15
11.25
12
5.
14.83
9.
a. Which of the following prices would be associated with a long-run equilibrium?
O $11.25
O $15
O $12
Next>
< Prev
9 jo 9
72°F Partly sunny
近
ere to search
ofile Ball10
F7
F3
&
%23
24
4.
2.
R.
K
H
B.
In the table below, the firm;
Output Total Revenue Total Cost
$0
$30
$60
$90
$120
$150
$180
$25
$49
$69
$91
$117
$147
$180
O a. cannot be in a perfectly competitive industry, because its short-run economic profits
are greater than zero.
O b. must be in a perfectly competitive industry, because its marginal cost curve
eventually rises.
O c. cannot be in a perfectly competitive industry, because its long-run economic profits
are greater than zero
O d. must be in a perfectly competitive industry, because its marginal revenue is constant.
123 456
1
Chapter 10 Solutions
LSC CUMBERLAND EC202 MICRO>PKG<
Knowledge Booster
Similar questions
- Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by each firm in the industry is: LO10.3 a. A horizontal line at 2 cents per paper clip. b. A vertical line at 2 cents per paper clip. c. The same as the market demand curve for paper clips. d. Always higher than the firm’s MC curve.arrow_forwardFigure 14-1 Suppose that a firm in a competitive market has the following cost curves: Refer to Figure 14-1. If the market price falls below $6, the firm will earn O a. positive economic profits in the short run. O b. negative economic profits in the short run but remain in business. O c. negative economic profits in the short run and shut down. O d. zero economic profits in the short run. PRICE 20 18 16 14 13 10 8 6 4 2 MC 1 2 3 QUANTITY 4 ATC AVC 5arrow_forward34. How do i solve this questionarrow_forward
- Price and costs (dollars) 20 10 L O 10 20 MC O always. ATC MR 40 30 Quantity (per day) The figure above shows a perfectly competitive firm. In the short run, the firm will shut down only if the AVC of producing 10 units is more than $20. only if the AVC curve reaches its minimum before 10 units are produced. only if the AVC of producing 10 units is less than $20.arrow_forwardComplete the table above. Graph AVC , ATC, and MC on the same graph. Suppose market price is $30. How much will the firm produce in the short run? How much are total revenue? Suppose market price is $50. How much will the firm produce in the short run? What are total profits?arrow_forwardTIT Quantity 10 Total Cost Total Revenue $ 25 50 20 30 60 100 150 105 40 160 200 Based on the data above, a profit-maximizing firm in a perfectly competitive market would decide to produce: O 10 units of output. 40 units of output. 30 units of output. 20 units of output.arrow_forward
- Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: 20 ATC 18 16 AVC 14 13 H 12 6. MC 2 1 2 3 QUANTITY Refer to Figure 14-1. If the market price is $13, the firm will earn O a. positive economic profits in the short run. O b. zero economic profits in the short run. O c. negative economic profits in the short run but remain in business. O d. negative economic profits and shut down.arrow_forwardConsider the following data facing a perfectly competitive firm: price = $20, quantity of output produced = 600 units, average total cost = $16, average fixed cost = $12, and marginal cost = $22. This firm should O a. increase output to maximize profit. O b. not change output in the short run since profit is already maximized. O c. shut down immediately. O d. reduce output but not shut down in the short run to maximize profit. O e. raise price above $20 to maximize profit in the short run.arrow_forwardMC ATC AVC 23 22 16 MR 12 11 14 17 19 Quantity (units) Consider the perfectly competitive firm in the above figure. At what price will long-run equilibrium occur? Select one: O a. $23 O b. $22 O c. $11 O d. $12 Price (dollars per unit)arrow_forward
- A perfectly competitive firm that makes car batteries has total fixed costs of $10,000 per month. The market price at which it can sell its output is $100 per battery. The firm's minimum AVC Is $105 per battery. The firm is currently producing 500 batteries a month (the output level at which MR=MC). This firm is making a O loss, shut down O profit, shut down O profit: increase O loss; increase and should. productionarrow_forward8.6arrow_forwardAssume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. O b. decrease their output. Oc make no adjustments as they are already maximizing their profits. Od. increase their output. Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning