Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
9th Edition
ISBN: 9780134143071
Author: PINDYCK, Robert, Rubinfeld, Daniel
Publisher: PEARSON
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Chapter 8, Problem 12E
(a)
To determine
Identify the industry in long-run equilibrium.
(b)
To determine
Identify the amount that used to purchase the new technology.
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Short-run supply and long-run equilibrium
Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.
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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.
Suppose the cost function for a firm is given by C(Q) = 100 + Q2. If the firm sells output in a perfectly competitive market and other firms in the industry sell output at a price of $10,A) What level of output should the firm produce to maximize profits or minimize losses?B) What are the profits at the optimal output amount?
C) Should the company produce this optimal amount or should it shut down?
A firm produces a product in a competitive industry and has a total cost function C = 80 + 4q + 2q2 and a marginal cost function MC = 4 + 4q. At the given market price of $28, the firm is producing 7 units of output. Is the firm maximizing its profit? What quantity of output should the firm produce in the long run?
Chapter 8 Solutions
Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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- Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following? a. the price of corn b. the profitability of corn farmers who quickly adopt the new technology c. the profitability of corn farmers who are slow to adopt the new technology d. the price of soybeans, a substitute product for cornarrow_forwardSuppose the cost function for a firm is given by C(Q) = 100 + Q2. If the firm sells output in a perfectly competitive market and other firms in the industry sell output at a price of $10, what level of output should the firm produce to maximize profits or minimize losses? What will be the level of profits or losses if the firm makes the optimal decision?arrow_forwardSuppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be Multiple Choice the same as the initial equilibrium price, but the new industry output will be greater than the original output. greater than the initial price, and the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output. the same as the initial equilibrium price, and the industry output will remain unchanged.arrow_forward
- The market for drones is perfectly competitive. Assume for simplicity that fractions of everything, including firms, is possible. We have identical firms, each with a Total Cost curve of TC=712+q^2 and Marginal Cost curve MC=2q. Market demand is Q=895-2P. What is the long-run equilibrium market price? Enter a number only, drop the $ sign.arrow_forwardA perfectly competitive firm sells its good for $20. If marginal cost is four times the quantity produced, how much does the firm produce? Why? Assuming perfect competition, there is not enough information to determine how much the firm is producing. Assuming perfect competition, the firm is producing where MC is twice MR. If the price is $20, then MC is $40. This means that the firm is producing 10 units. Assuming perfect competition, the firm is producing where MR = MC. If the price is $20 and MC is four times the quantity, it is producing 80 units. Assuming perfect competition, the firm is producing where MR = MC = P. Since price is $20, MR is $20. If MC is 4 times the quantity, it is producing 5 units.arrow_forwardIf a competitive firm finds that it maximizes short-run profits by shutting down, which of the following must be TRUE? A)p < AVC for all levels of output. B)The firm will earn zero profit. C)p < AVC only if the firm has no fixed costs. D)p < AVC only for the level of output at which p = MC.arrow_forward
- Which of the following represents a long-run decision for the firm? a. rehiring workers who were previously laid off. b. determining what price to charge for a given level of output. c. deciding how much output to supply to the market at the current market price. d. building another wing on the plant in order to add a new assembly line. answer. (d. building another wing on the plant in order to add a new assembly line.) Please help me explain this questions. Thanks in advancearrow_forwardSuppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be the same as the initial equilibrium price, and the industry output will remain unchanged. greater than the initial price, and the new industry output will be greater than the original output. the same as the initial equilibrium price, but the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output.arrow_forwardMultiplying one firm’s short-run supply function to the number of firms in a specified industry will give you the short-run market supply function. True or false.arrow_forward
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