EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 15, Problem 7MCQ
To determine
Among the given options, identify the correct one on the basis of below statement:
A permanent increase in demand _____ economic profit in the short run and some firms will _____ in the long run is to be determined.
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Students have asked these similar questions
What determining
factor do buyers use to
select products in a pure
competition market?
A. Brand
B. Quality
C. Price
D. Profit
If firms can easily enter and exit a market, then
A. firms will earn zero economic profit in the short run.
B. firms will produce at minimum average fixed cost in the long run.
C. firms will produce where price is greater than marginal cost.
D. firms will produce where price is greater than marginal revenue.
E. firms will produce at minimum average cost in the long run.
a. Graph a purely competitive market showing the point of equilibrium at a price of $150 and a total product of
400,000. b. Next to this graph, graph the purely competitive firm. What price will the firm charge for the product? Will
they charge $150, less than $150, or more than $150? c. Show the demand, average revenue, and marginal revenue
curve on the graph for the firm. d. Show the profit maximizing quantity for the firm at 250 units of output, or tp. e.
Show this firm making a profit of $5,000, making sure to solve for the numerical value for the ATC at the quantity, or tp,
of 250, and showing the profit area on the graph.
Chapter 15 Solutions
EBK FOUNDATIONS OF ECONOMICS
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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- d. What is the deadweight loss in this market, if any? e. How does a firm decide to increase or decrease output? i. What do they do when marginal revenue is less than marginal cost? ii. What do they do when marginal revenue is more than marginal cost? f. When does a firm decided to shut down verses temporarily stopping production? g. In this market the demand curve is what? i. Short run ii. Long run h. In this market the supply curve is what? i. Short run ii. Long runarrow_forwardIs there perfect competition in the food delivery market? Why and How?arrow_forwardA firm that is producing the quantity at which marginal cost exceeds both average total cost and the market price will increase its economic profit by a. producing a smaller quantity b. producing a smaller quantity c. raising the price to equal marginal cost d. producing the quantity that minimises average total cost e. producing a larger quantityarrow_forward
- In a perfectly competitive market Select one: a. each firm takes the good's price as given to it by the market. b. each firm sets its own price so that it is different from its competitors. c. an economic profit is certain. d. consumers are persuaded by advertising.arrow_forwardDefine supply, demand, prices and marketing. and explain the relationship between these concepts.arrow_forwardIf a firm charges a lower price they will have a lower profit margin but a higher profit; if a firm charges a higher price they will have a higher profit margin but a lower profit. Which of the following statements is accurate? A. The firm should charge a lower price for the higher profit. B. The firm should a higher price for the lower profit. C. The firm should charge a higher price for the higher profit margin. D. Whether the firm should charge a higher price or lower price indeterminate.arrow_forward
- Which of the below changes in demand in the long-run would lead to entry in the perfectly competitive market for wheat? a. a decrease in the number of buyers b. a decrease in buyers' expected price of wheat c. an increase in income (wheat is a normal good) d. both a) and b) would lead to long-run entry in perfect competitionarrow_forwardWhen price equals marginal cost,Select one:A.the industry is in long-run equilibrium.B.firms make positive profits.C.the marginal benefits of consuming an extra unit of the good exactly equals the marginal cost to society of producing the good.D.firms make zero profits.arrow_forwardDoug's Donut Shop operates in a competitive market and is currently producing 200 donuts. He has average revenue of $1.50, his average total cost is $1, and his total fixed costs are $30. Does Doug have profits or losses?Select one:a. losses of $300.b. losses of $100.c. profits of $200.d. profits of $100.arrow_forward
- Information about Competitive marketarrow_forwardIf a company with market pewer is not making enongh profit (in equilibrinm), a. the price will drop, thus increasing total revenue because demand is elastic. b. price will increase thins increasing total income because demand is inelastic. c. it will exit the industry in the long run if the economic benefit is negative. d. it will expand sales until they reach the unit elastic point on demand. Market power a. it is the ability to increase the price without losing all sales. b. it exists whenever the firm faces a downward sloping demand curve. c. the greater the less elastic is the demand. d. the smaller, the more positive is the cross elasticity of demand. e All of the Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardAttempts 2. Profit maximization of a seller in a competitive price-searchermarket Consider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 (nuчßno 3.50 3.00 2.50 Q Search Profit Maximizing Outcome Profitarrow_forward
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