Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 8, Problem 6SQ
To determine
The implication of the price of OD.
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How does an increase in market demand for a product in a perfectly competitive market affectthe short-run and long-run equilibrium? Show on a diagram and discuss the adjustments firms make in terms of price and quantity to reach the new equilibrium.
Note:-
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.
The diagram below, shows the cost structure for a firm in perfect competition.
Assume that the market price is £12.
The short-run output of the firm is ______ and the profit is ______.
a. 30; -60
b. 36; 0
c. 54; 0
d. 54; 324
e. 18, -72
f. All then other answers are wrong
In the long run, perfectly competitive firms are at equilibrium when:
(LMC = Long-Run Marginal Cost; LAC = Long-Run Average Cost)
a.P = LAC > LMC
b.P = LMC = LAC.
c.P = LMC > LAC
d.P = MR.
Chapter 8 Solutions
Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- Calculate the profit for the perfectly competitive form above if the market price is $1 (graph left side is dollar sign and bottom is the Q AMC, ATC And AVC listed)arrow_forwardA perfectly competitive firm would produce______________________________________if it wanted to maximize its profit: Answers: A. the output where MC equals price, the marginal revenue B. the output where the ATC curve is at a minimum C. as much output as it is able to produce D. the output where the marginal cost curve is at a minimumarrow_forwardA perfectly competitive firm faces the short-run cost schedule shown in Table 1. A) Calculate average total cost (ATC=TC/Q), marginal cost (MC=∆TC/∆Q) and marginal revenue (MR=∆TR/∆Q) for each level of output. The price per unit of output is £16. B) Plot ATC, MC and MR on a graph and mark the profit-maximising output. At what output is profit maximised? C) How much profit/loss is made at the optimum level of output?arrow_forward
- Under perfect competition, firms profit in the long run will be:- (1) normal profit (2) abnormal profit (3) normal losses. Searrow_forwardDon't use chatgpt, I will 5 upvotes Refer to Figure 14-1. If the market price is P2, in the short run, the perfectly competitive firm will earn ◻ positive economic profits. negative economic profits but will try to remain open. zero economic profits. negative economic profits and will shut down.arrow_forwardA perfectly competitive firm faces the short-run cost schedule shown in Table Assume market price declines to £9 per unit. If the firm's average variable cost is £9.5, should the firm shut down in the short run? In the long run? Explain. If the firm is typical of other firms, what price will it charge in the long run? Explain.arrow_forward
- A perfectly competitive firm that makes car batteries has a fixed cost of $10,000 per month. The market price at which it can sell its output is $100 per battery. The firm’s minimum AVC is $105 per battery. The firm is currently producing 500 batteries a month (the output level at which MR = MC). This firm is making a _____________ and should _______________ production a. profit; increase b. profit; shut down c. loss; increase d. loss; shut downarrow_forwardSuppose a perfectly competitive firm's demand curve is below its average total cost curve. Explain the conditios under which a firm continues to produces int he short run.arrow_forwardIn the long run, firms in a competitive marketA.earn positive accounting profit, but zero economic profit.B.earn zero accounting profit and zero economic profit.C.shut down because their accounting profit goes to zero.D.earn negative accounting profit, but positive economic profit.arrow_forward
- A perfectly competitive firm will be interested in producing a positive output only when the price of its product exceeds its ______. a. AFCmin b. AVCmin c.MCmin d.ATCminarrow_forwardWhy is a firm in a perfectly competitive market called a price taker? Why do the price, MR and demand faced by a firm in such a market coincide? Explain. please don,t copy and paste from anywhere. Answer step by step and use graph if possiblearrow_forward
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