MICROECONOMICS >IA<
FD Edition
ISBN: 9781260511055
Author: McConnell
Publisher: MCG
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Question
Chapter 13.1, Problem 3QQ
To determine
Price and average total cost .
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Students have asked these similar questions
True/False
In Perfect competition market, differentiated goods are sold.
Which formula below best represents the pure competition model?
Multiple choice:
A: Price=Demand Curve=Marginal Revenue=Average Revenue
B: Price=Supply Curve=Marginal Cost=Average Total Cost
C: Price>Marginal Revenue
D: Total Revenue-Total Cost=Net Profit or (Net Loss)
The purely competitive firm in the above exhibit should
a.
shut down
b.
produce 5 units of output
c.
produce 10 units of output
d.
produce 12 units of output
e.
produce 20 units of output
6. At the profit-maximizing/loss-minimizing level of output, what is the firm’s profit or loss? Based on this situation, what do you recommend for the firm and why?
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Similar questions
- Evaluate the winery industry using the five assumptions of perfect competition. Make sure you give empirical evidence when possible (or what empirical evidence would be needed if not possible) in making your evaluation. Five assumptions are: 1. Large number of buyers and sellers; 2. No significant economies of scale; 3. Easy entry and exit (no entry barriers); 4. Homogenous product and 5. Perfect information).arrow_forward18. Select all that apply. In a perfectly competitive market, MR equals Price Average revenue Total revenue Δ in total revenue / Δ in quantityarrow_forwardPerfect Competition MC - Marginal Cost MR - Marginal Revenue ATC - Average Total Cost Refer to the figure above. If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price, then the firm will set its price at ____ and produce ____ units. $4; 40 $6; 40 $6; 55 $6; 30arrow_forward
- In perfect competition, price is _____________. increasing. decreasing. none of these answers. equal to marginal revenue.arrow_forwardPerfect Competition in the Long Run and Efficiency Scenario Imagine a market where there is perfect competition between two or more companies, such as a fish market where vendors offer the same product at the same price or online ticket auctions like StubHub. In this market there are four key elements to perfect competition: A large number of buyers and sellers: No barriers to entry or exit: Perfect mobility for customers choosing products: Homogenous products. Explain how output, price, and profit are determined in your perfectly competitive market in the long run. How does that lead to efficiency? How could changes in technology affect the market? How could an increase in demand affect the market?What are the effects of new businesses entering the market?What are the effects of businesses leaving the market?arrow_forwardDefine or describe the following competitive supply and profit maximisation economic terms:6.3.1 The output rule 6.3.2 Zero economic profit 6.3.3 Long-run competitive equilibrium 6.3.4 Constant-cost industryarrow_forward
- Select which characteristic of a perfectly competitive industry is not met in the examples below. Four fundamental characteristics of a perfectly competitive industry: (1) there is a large number of buyers and sellers, (2) firms in the industry produce and sell a homogeneous product, (3) information is equally accessible to both buyers and sellers, and (4) there are insignificant barriers to industry entry or exit. Part 2 Even though one firm produces a large portion of the industry's total output, there are many firms in the industry, and their products are indistinguishable. Firms can easily exit and enter the industry. This example violates characteristic number enter your response here. Part 3 There are many buyers and sellers in the industry. Consumers have equal information about the prices of firms' products, which differ slightly in quality from firm to firm. This example violates characteristic number enter your response here. Part 4 Many taxicabs…arrow_forwardQuestion 7 The slope of the total revenue curve for a competitive firm is equal to __________, which is equal to __________. Group of answer choices marginal revenue; price marginal cost; price marginal revenue; quantity marginal cost; quantityarrow_forwardRefer to the characteristics of perfect competition and examine the hawker industry in Singapore. Do you consider the hawker industry in Singapore perfectly competitive? Justify your answers.arrow_forward
- 3 a) Start with a model of the situation before the crisis in Ukraine. Draw a model of a representative individual firm in the market for wheat, i.e. an Australian wheat farmer who is a price-taker in the global market for wheat, in long-run equilibrium. Comment on the assumed market structure. Show and explain the amount of wheat the farmer will produce to the market, and explain revenue, costs and profits.arrow_forwardQuestion 1.Suppose the market equilibrium price of wheat is Rs.2 per bushel in a perfectly competitive industry. Draw the industry supply and demand curves and the demand curve for a single wheat farmer. Explain why the wheat farmer is a price trackerarrow_forwardWhich of the following is true only of a firm in a perfect competition market structure? Question 8 options: 1) marginal revenue = average revenue 2) average variable cost = average total cost – average fixed cost 3) average revenue = total revenue ÷ total output 4) average fixed cost = average variable costarrow_forward
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