Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 12.1.9PA
To determine
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Briefly explain four assumptions of perfectly competitive market
Briefly explain the reason for why in a competitive market we expect economic profits to be zero inthe long run. Why do firms operate even though they face 0 economic profit?
Suppose Sophia sells flowers in a perfectly competitive market and always maximizes profit.
(a) Given the current market price is $5, Sophia sells 2000 flowers every week and makes zero profit. What are the amounts of marginal revenue, marginal cost and average total cost at this level of output? Briefly explain.
(b) Continued from (a), if the market demand decreases, what will be the short-run impact on Sophia’s profit? Explain in detail with diagrams.
Chapter 12 Solutions
Microeconomics (7th Edition)
Ch. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PACh. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.1.9PACh. 12 - Prob. 12.2.1RQ
Ch. 12 - Prob. 12.2.2RQCh. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4PACh. 12 - Prob. 12.2.5PACh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3PACh. 12 - Prob. 12.3.4PACh. 12 - Prob. 12.3.5PACh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.5.8PACh. 12 - Prob. 12.5.9PACh. 12 - Prob. 12.5.10PACh. 12 - Prob. 12.5.11PACh. 12 - Prob. 12.5.12PACh. 12 - Prob. 12.6.1RQCh. 12 - Prob. 12.6.2RQCh. 12 - Prob. 12.6.3RQCh. 12 - Prob. 12.6.4PACh. 12 - Prob. 12.6.5PACh. 12 - Prob. 12.6.6PACh. 12 - Prob. 12.6.7PACh. 12 - Prob. 12.6.8PACh. 12 - Prob. 12.6.9PACh. 12 - Prob. 12.6.10PACh. 12 - Prob. 12.1CTECh. 12 - Prob. 12.2CTECh. 12 - Prob. 12.3CTE
Knowledge Booster
Similar questions
- Briefly explain what the market will illustrate when perfectly competitive firms produce at the quantity where P = MC and explain why this happens. Hint: Efficiencyarrow_forwardBriefly explain the condition when firm decide to leave (exit) the marketarrow_forwardAssume hotdog stands in New York are in a perfectly competitive market. Jacob is taking over a hot dog stand from his uncle. Let’s say initially it is the only hotdog stand in three blocks. Currently he charges a price of $5 a hotdog and sell about 100 hotdogs every day. His uncle left to cart to him, but he still has to pay a $18,250 a year for an inspection and permit (think this as rent). For 100 dogs, it costs him $100 a day in ingredients and $50 a day in propane to grill. What is Jacob’s average fixed cost (per day)? What is his variable cost (per day)? And finally, what is his average total cost (per day)? In side-by-side graphs please illustrate what the market for hotdogs looks like as a whole and for your individual stand. Be sure to label everything. c. How much profit are you earning? Calculate it and show it on the graph. d. Now imagine, others are realizing Jacob’s success and start filling up the empty street corners with their hotdogs. In a new…arrow_forward
- Assume hotdog stands in New York are in a perfectly competitive market. Jacob is taking over a hot dog stand from his uncle. Let’s say initially it is the only hotdog stand in three blocks. Currently he charges a price of $5 a hotdog and sell about 100 hotdogs every day. His uncle left to cart to him, but he still has to pay a $18,250 a year for an inspection and permit (think this as rent). For 100 dogs, it costs him $100 a day in ingredients and $50 a day in propane to grill. a. What is Jacob’s average fixed cost (per day)? What is his variable cost (per day)? And finally, what is his average total cost (per day)? b. In side-by-side graphs please illustrate what the market for hotdogs looks like as a whole and for your individual stand. Be sure to label everything. c. How much profit are you earning? Calculate it and show it on the graph. d. Now imagine, others are realizing Jacob’s success and start filling up the empty street corners with their hotdogs. In a new side-by-side graph…arrow_forwardA competitive firm's supply curve is identical to its marginal cost curve. True or false? Briefly explain.arrow_forwardGraphically depict a purely competitive firm in the short-run. You can have the firm making a profit or loss in the short-run. Brief explanation and graphs required.arrow_forward
- 3. You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? a. The prices of agricultural products b. The profits of farmers c. The equilibrium output in agricultural markets d. The number of farms Please help with 3 d.arrow_forwardDraw a graph and explain the supply curve of a perfecly competitive firm. (please get detailed)arrow_forward. The market for fertilizer is perfectly competitive. Firms in the market are producing output, but they are currently making economic losses. a) How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer?b) Draw a graph, illustrating the present situation for the typical firm that is making losses.c) Assuming there is no change in demand or the firm's cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the marketarrow_forward
- How do I know this graph shows a firm that is perfectly competitive? Which curve tells me it is?arrow_forward31. Which of the following is the best example of a perfectly competitive market? a. soft drinks b. farm products c. diamonds d. athletic shoesarrow_forwardEd produces table lamps in the perfectly competitive desk lamp market. Fill in the missing values in the following table Suppose the equilibrium price in the desk lamp market is $50. How many table lamps should Ed produce, and how much profit will he make? If next week the equilibrium price of desk lamps drops to $30, should Ed shut down? Explain. Output / Week Total Cost AFC AVC ATC MC 0 $100 1 $150 2 $175 3 $190 4 $210 5 $240 6 $280 7 $330 8 $390 9 $460 10 $540arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc