Foundations of Economics, Student Value Edition (8th Edition)
8th Edition
ISBN: 9780134489230
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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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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“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?
A 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 output
Show all the work clear handwriting
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.
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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- Write down the attributes of a perfectly competitive market (200 words).arrow_forward(Table: Costs for Alina's Apple Pies) Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $38, what profit (or loss) will this firm earn? a profit of $200 a loss of $30 T a loss of $200 a profit of $80 This is what I think the answerisarrow_forwarda) Explain the factors that drive profits to zero in perfectly competitive markets in the long run. b. A firm will choose to operate at a loss in the short run for a certain reason. Explain this reason. c) When do firms decide to shut down production in the short run. Explain this.arrow_forward
- The marginal cost to produce one bottle of developer is $5. There is no fixed cost. Note that this is a market demand, not a firm's individual demand schedule. 1)Calculate total revenue, total cost, marginal revenue and total profit. Quantity Demanded : 0, 10, 20, 30, 40, 50, 60, 70, 80 Price: 40, 35, 30, 25, 20, 15, 10, 5, 0 2) If the market for developer is perfectly competitive, what quantity will be produced? What price will be charged? What will the firm’s profit be? Write a sentence explaining how you determined each of those three answearrow_forwardFor each of the following, is the business a price-taking producer? Explain your answers. a. A cappuccino café in a university town where there are dozens of very similar cappuccino cafés. b. The makers of Pepsi-Cola. c. One of many sellers of Durian fruits at a General Santos City’s public market.arrow_forwardQ2. Ramzah owned a burger stands along the beach. Figure 2 shows Ramzah’s cost curves. Figure 2: Market for Burger (a) What is Perfect Competition? (b) If the market price of a burger is $4, what is Ramzah’s profit-maximizing output? (c) Calculate the economic profit that Ramzah’s makes. (d) With no change in demand or technology, how will the price change in the long run? (e) Distinguish between technological efficiency and economic efficiency.arrow_forward
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