Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 24, Problem 2E
To determine
(a)
To identify:
The labelling of
To determine
(b)
To identify:
The profits that can be earned if
To determine
(c)
To identify:
The shut down and break-even prices based on the given diagrams.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Label the curves in the following graph
A. At each market price p1, p2, p3 at what output level would the firm produce?
B. What profit would be earned if the market price was p1?
C. What are the shutdown and break prices?
What are the long-run market equilibrium price and quantity of hibiscus plants? How many firms operate?
Use a graph to demonstrate the scenario where a competitive firm would be earning positive profit in the short run. Can this scenario be maintained in the long run? Why?
What are the ‘shutdown point’ and ‘break even point’ of a competitive firm . Explain with diagram.
A competitive market starts in a situation of long run equilibrium. Then there is an increase in demand. Explain what happens in the short run and long run, using necessary diagrams.
Knowledge Booster
Similar questions
- What price will a perfectly competitive firm end up charging up the long run? Why?arrow_forwardDraw a graph of a typical firm and an industry market (with supply and demand). Illustrate and explain what happens in the market if at the initial price, the typical firm is earning an economic profit. Show and explain how the two graphs will adjust toward market equilibrium.arrow_forwardDraw a diagram illustrating the case of a perfectly competitive business firm making a profit. Label the demand curve D, the marginal revenue curve MR, the marginal cost curve MC, and the average total cost curve ATC. Show the quantity the firm will choose to produce and the price it will charge and mark that Q1 and P1 respectively.arrow_forward
- Use the figure below, which shows the situation facing Mike’s Bikes, to answer the questions below. The demand and costs of other mountain bike producers are similar to those of Mike’s Bikes. What quantity does the firm produce and what is its price? Calculate the firm’s economic profit or economic loss. What will happen to the number of firms producing mountain bikes in the long run? How will the price of a mountain bike and the number of bikes produced by Mike’s Bikes change in the long run? How will the quantity of mountain bikes produced by all firms change in the long run? Is there any way for Mike’s Bikes to avoid having excess capacity in the long run? Is the market for mountain bikes efficient or inefficient in the long run? Explain your answer.arrow_forwardHow a firm respond to economy profits and economy losses in perfectly competitive market?arrow_forwardThe following attached graph represents the situation of Sindbad’s caps, a firm selling caps in the perfectly competitive caps industry. please no handwriting graph QUESTION 1 How much output should Sindbad produce to maximize his profit, if the market price is equal to $11? How much profit (loss) will he earn? Indicate the profit (loss) area on the graph. Suppose Sindbad decides to shut down. What would his loss be?arrow_forward
- Shazam, a maker of magic wands, is selling in a purely competitive market. Its output is 500 wands, which sell for $10 each. At this level of output, the marginal cost is $10 and the average variable cost is $12. Should the firm increase output, decrease output, or not produce? Explain why?arrow_forwardThe graph shows the marginal cost and average total cost for Copy Central, a perfectly competitive firm. Recall that in perfect competition, price equals marginal revenue. Fill in the blanks.arrow_forwardWhy is perfect competition assumed to be the best market situation in most cases? Draw a graph showing the long run result of perfect competition and explain why it benefits society.arrow_forward
- What does acceptable loss mean for a competitive firm? Explain and Draw a grapharrow_forwardHow does a perfectly competitive firm decide what price to charge?arrow_forwardThe situation facing by firm “Smart”, a producer of running shoes, is shown in the following figure. What quantity does Smart Shoes produce? Answer: What is the price of a pair of Smart shoes? Answer: What is Smart’s economic profit or economic loss? Answer:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax