Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 12, Problem 12.5.6PA
To determine
Why the farmer is not charging higher than the market
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Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer.
Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly.
Please answer all parts:
How does fixed cost affect marginal cost?
Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer.
Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly.
he following graph summarizes the demand and costs for a firm that operates in a perfectly competitive market.
What level of output should this firm produce in the short run?
What price should this firm charge in the short run?
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What is the firm’s total variable cost at this level of output?
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problem 1-6 are solved, this is subparts.
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
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- Jeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. What is the break-even price and quantity? What is the shut-down price and quantity? If the price at which Jeannette can sell wheat is $16/bu., will Jeannette earn a profit in the short run? In the short run, should she produce or shut down? If the price at which Jeannette can…arrow_forwardJeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. What is the break-even price and quantity, shut-down price and quantity? If the price at which Jeannette can sell wheat is $16/bu., will Jeannette earn a profit in the short run? In the short run, should she produce or shut down? Q VC TC MC AVC ATC 0 0 10 160 20 220 30 300 40 420 50 580…arrow_forwardJeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. Q VC TC MC AVC ATC 0 0 10 160 20 220 30 300 40 420 50 580 60 780 70 1,020arrow_forward
- Suppose Felix runs a small business that manufactures frying pans. Assume that the market for frying pans is a perfectly competitive market, and the market price is $20 per frying pan. The following graph shows Felix's total cost curve.arrow_forwardIn the short-run, if the marginal cost of a firm in a competitive industry is increasing while its average variable cost is downward sloping, what can you say about slope of average total cost?arrow_forwardA firm sells 1,000 units per week. Suppose the average variable cost is $15, and the average cost is $55. In the short run, the break-even price is:___?_____. . In the long run, the break-even price is . Suppose the firm charges a price of $5 per unit. Use the following table to indicate whether the firm will shut down or continue to produce in the short run and the long run. Time Continue to Produce Shut Down Short Run ? ? Long Run ? ?arrow_forward
- What is the value of the average cost? If the price in the market of the perfect competitive firm is P9 Equilibrium quantity would be? Why?arrow_forwardWhat is the relationship between marginal cost and the short-run supply curve for the purely competitive firm?arrow_forward-Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability. -Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? -Briefly explain what is meant by the term "variable costs" and provide three examples of same. -Briefly explain how the total revenue for a profit-seeking firm is determined.arrow_forward
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