Chapter 8, Problem 16PAE

Suppose the book-printing industry is a competitive market, and it begins with a long run competitive equilibrium. Over time, in the long run, what will happen to the market for bookprinting? Explain the process as much as the ultimate conditions in the market. No graph is required for part (c).

Which of the following scenarios is not consistent with a perfectly competitive market? Choice 1 of 4:In the market for phones everyone considers iPhones and Androids to be essentially the same thingChoice 2 of 4:Each producer of backpacks can freely set the price, while consumers of backpacks take the price that is setChoice 3 of 4:The stalls selling lucky rabbit feet by the airport have a marginal revenue that is equal to the market priceChoice 4 of 4:Mike, Elle, and Dustin are all attempting to sell lemonade, but at 1pm Mike can easily go home and Lucas can easily start selling.

The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. a. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? b. Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. [Upload a picture] c. Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market

The Japanese government is considering banning beer advertising throughout the country. The government thinks this move might enhance competition the big four beer brewing companies in Japan. Illustrate using economic theory and the concept of producer surplus whether you agree with the government about the possible effects of banning beer advertising.? What might be the impact of banning advertising on the four largest breweries? Would the impact be the same for a micro/craft brewer in the market

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?

Which market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?

Justin’s Jeans sells in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $33 per unit, and the total fixed cost is $30.(a) Identify the profit-maximizing quantity. Explain using marginal analysis. (b) Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show your work.(c) Calculate the average fixed cost of producing 6 units. Show your work.(d) Based on your answer to part (b), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain.(e) Based on your answer to part (b), will the market price increase, decrease, or stay the same in the long run? Explain.(f) The income elasticity of demand for Good M is 1.4, and the cross-price elasticity of demand for jeans with respect to the price of Good M is −0.75. Based on your answer to part (e), what will happen to the demand for jeans? Explain.(g) Now assume that the market in which…

Question 5.5.  T-Shirt Enterprises is selling in a purely competitive market.  It is producing 3,000 units, selling them for $2 each.  At this level of output, the average total cost is $2.50 and the average variable cost is $2.20.  Based on these data, the firm should  shut down in the short run.        decrease output to 2,500 units.        ontinue to produce 3,000 units.        increase output to 3,500 units. Question 6.6.   A firm should increase the quantity of output as long as its   marginal revenue is greater than its marginal cost.        marginal cost is greater than its marginal revenue.        average revenue is greater than its average total cost.        average revenue is greater than its average variable cost. Question 7.7.   In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is  equal to the price.        less than the price.        greater than the price.        equal to the average cost. Question 8.8.   The classic…

Draw 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.