Foundations of Economics, Student Value Edition (8th Edition)
8th Edition
ISBN: 9780134489230
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 15, Problem 6MCQ
To determine
The correct option for the firm's short run supply curve is same as ___ is to be determined.
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A competitive firm’s short-run supply curve is its cost curve above its cost curve
. a. average-total-; marginal-
b. average-variable-; marginal-
c.marginal-; average-total-
d. marginal-; average-variable-
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a. Draw the marginal cost and average total cost curves for a typical firm. Explain why the curves have the shapes that they do and why they cross where they do.
b. Does a competitive firm’s price equal its marginal cost in the short run, in the long run, or both? Explain.
In the long run, firms in a competitive marketA.earn positive accounting profit, but zero economic profit.B.earn zero accounting profit and zero economic profit.C.shut down because their accounting profit goes to zero.D.earn negative accounting profit, but positive economic profit.
Chapter 15 Solutions
Foundations of Economics, Student Value Edition (8th Edition)
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
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Similar questions
- Draw the short-run ATC, AVC, MC, MR and Demand graphs for a perfectly competitive market experiencing a profit. In each part, show Total Cost (TC), Total Revenue (TR), shade the profit. Clearly label Q for the equilibrium quantity point and P for market price point.arrow_forwardA breakfast place, a perfectly competitive eatery, sells its special for $5. Cost of waiters, cooks, and power average out to $3.95 per meal; cost of lease, insurance and other expenses average out to $1.25 per meal. What should this owner do. A)close her doors immediately b)continue producing in the short and long run c)continue producing in the short run, but plan to go out of business in the long run if price does not increase in the future d)raise her prices above the perfectly competitive level e)lower her outputarrow_forwardA competitive firm’s short-run supply curve is its_________ cost curve above its _________ costcurve.a. average-total-; marginalb. average-variable-; marginalc. marginal-; average-totald. marginal-; average-variablearrow_forward
- Explain the concepts of revenue, costs and profit.arrow_forward(a) A competitive firm’s short-run supply curve depends on two curves. Which two exact curves are we talking about? (b) Clearly explain which portion/part of these curves provide us with the short-run supply curve of such a firm and which part is excluded from being considered a part of such a supply curve? (c) In this context, explain the economic reason why the short run supply curve of a competitive firm slopes upwards.arrow_forward“An upward – sloping demand curve doesn’t make sense in my business. All I know is that if I raise my prices, revenue doesn’t go up, it goes down. I don’t sell more products, I sell less. “Can you straighten out this business man’s thinking?arrow_forward
- assume fresh vegetable market is perfectly competitive and a typical farmer was break-even prior to the price changes. explain and illustrate graphically, the effect of change in price on the short-run position of an individual farm whose crops have not been affected by the flood. explain and illustrate the long run position for a typical farmer.arrow_forwardA company in a perfectly competitive market produces an output level Q = 100 where marginal revenue is equal to marginal cost and has the following revenue and cost levels: Marginal cost curve intersects the average variable cost curve at $150. Marginal cost curve intersects the average total cost curve at $200. Marginal cost curve intersects the marginal revenue curve at $170. At Q = 100, ATC = $210 and AVC = $155 At this output of Q = 100, calculate: total revenue (TR), total cost (TC), variable cost (VC), and fixed cost (FC). Show your work (formulas and calculations)arrow_forwardWhat does (Box A + Box B) represent for this firm? A Marginal Revenue B Marginal Cost C Average Total Cost D Total Revenue E Total Cost F Profitarrow_forward
- 4. A competitive firm’s short-run supply curve is its________ cost curve above its ________ cost curve.a. average total, marginalb. average variable, marginalc. marginal, average totald. marginal, average variablearrow_forwardA 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 cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?arrow_forwardShow the competitive firm in long run equilibrium and describe productive and allocative efficiency. Demonstrate what happens to equilibrium price and quantity with an increase in market demand. Can the firm make economic profit in the short run? What about the long run?arrow_forward
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