EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 6, Problem 13P
(a)
To determine
(b)
To determine
Output firm will supply at market price of
(c)
To determine
Long-run price
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Students have asked these similar questions
Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis.
a.Approximately where do you think the price will end up in this market over the long run?
b.Last, instead of assuming a given price, how would you go about finding the equilibrium price if you were given information on market demand?
Suppose the competitive tablet market is in long-run equilibrium. If at this equilibrium, the typical firm produces 20,000
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Instructions: Enter your responses as a whole number.
a. induce entry into the market?
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b. cause firms to shut down production in the short run?
The figure below shows the supply and the demand for a good (left) and the cost curves of an individual firm in this market (right).
Assume that all firms in this market, including the potential entrants, have identical cost curves. Initially, the market is in equilibrium at
point A.
Price
Cost
MC
ATC
A
4
2
1
D
2 4 6 8 10 12 Quantity
Quantity
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and recall, the demand falls by 4 units at each price. At the new equilibrium, each firm in the market earns
and there will be
a. zero economic profit; neither entry nor exit of firms
b. positive economic profit; entries of new firms
C. zero accounting profit; both entry and exit of firms
d. negative economic profit; exit of existing firms
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