Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 2CQQ
To determine
The condition of the competitive firm maximizing the profit by choosing the quantity.
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Suppose the market price of a good is $20 and TC=0.5Q2.
A. What Q should a profit maximizing perfectly competitive firm choose?
B. What are profits?
C. Draw a graph that shows the short run choice of Q, revenue and profits.
a) How does imperfect competition differ from perfect competition?
b) True or False and explain: If a firm in imperfect competition makes economic profit in the short run they can sustain it in the long run.
c) True or False and explain: In imperfect competition all firms charge the same price.
Explain the concepts of revenue, costs and profit.
Chapter 14 Solutions
Principles of Economics (MindTap Course List)
Ch. 14.1 - Prob. 1QQCh. 14.2 - How does a competitive firm determine its...Ch. 14.3 - Prob. 3QQCh. 14 - Prob. 1CQQCh. 14 - Prob. 2CQQCh. 14 - Prob. 3CQQCh. 14 - Prob. 4CQQCh. 14 - Prob. 5CQQCh. 14 - Prob. 6CQQCh. 14 - Prob. 1QR
Ch. 14 - Prob. 2QRCh. 14 - Prob. 3QRCh. 14 - Prob. 4QRCh. 14 - Prob. 5QRCh. 14 - Prob. 6QRCh. 14 - Prob. 7QRCh. 14 - Prob. 8QRCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Prob. 4PACh. 14 - Prob. 5PACh. 14 - A firm in a competitive market receives 500 in...Ch. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Suppose that each firm in a competitive industry...
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- In perfect competition, a firm has __________ market power. A. No B. High C. Low D. Completearrow_forwardThe relationship between the firm's average variable, average total, and marginal cost curves above: Marginal Reveue = Price = US $ 2.50 ; a) Use the graph to find the Firm's profit-maximizing output. b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business? c) Will other firms with costs the same as Firms enter the market? Explain.arrow_forwardi. Calculate the marginal cost, marginal revenue and profit for each unit of production. ii. How many units should the firm produce to maximise profit?arrow_forward
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- 1.Explain how the long run differs from the short run in pure competition. 2. Explain how the entry and exit of firms affects resource flows and long-run profits and lossesarrow_forwardAt profit-max quantity, the firm earns _________________economic profit on the last unit sold. Why?arrow_forwardQuestion 1 A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?arrow_forward
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