ECON MICRO (with ECON MICRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
5th Edition
ISBN: 9781305631946
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 8, Problem 7.15P
To determine
Complete the table and answer the sub parts.
Introduction:
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11. The graph below shows the marginal revenue, marginal cost, and average total cost at different quantities for a firm in a perfectly competitive market. If this firm chooses to produce no output in the short run, what must the market price be?
A-Below $20
$21-$30
$31-$40
$41-$50
Above $50
7.
firm's implicit costs are $10,000, explicit costs are $5,000, and its total revenue is $10,000. This firm is earning
A-normal accounting profit
B-positive accounting profit of $5,000
C-positive economic profit of $5,000
D-normal economic profit
E-negative accounting profit of $5,000
M/c questions - Microeconomics
15) The competitive firm's long-run supply curve is that portion of the marginal cost curve that lies above which average cost?
A. fixed cost
B. variable cost
C. total cost
D. sunk cost
14) When a perfectly competitive firm makes a decision to shut down, which is most likely?
A. price is below the minimum of average variable cost
B. marginal cost is above average total cost
C. marginal cost is above average variable cost
D. fixed costs exceed variable costs
1. Explain in detail why it would be okay for you, if you were a business in a purely competitive industry, to make zero economic profits.
2.
Chapter 8 Solutions
ECON MICRO (with ECON MICRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
Knowledge Booster
Similar questions
- In the argument for why perfect competition is allocatively efficient, the price that people are willing to pay represents the gains to society and the marginal cost to the film represents the costs to society. Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?arrow_forwardWhat is a price taker firm?arrow_forwardWhat are the four basic assumptions of perfect competition? Explain in words what they imply for a perfectly competitive firm.arrow_forward
- Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.arrow_forward3 examples of perfectly competitive markets and does these firms profit in long run or short runarrow_forward1. Consider the following information about a business Rodriguez opened last year: price = $5; quantity sold = 15,233; implicit cost = $18,000; explicit cost = $33,000. What was Rodriguez's accounting profit and economic profit? Show your work. 2. What are fixed costs? What are variable costs? 3 Complete the following tablearrow_forward
- 37) In a perfectly competitive industry, the market price of the product is $15. Firm A is currently producing 300 units. The firm's marginal cost is $15, its fixed costs amount to $1000 and its average variable cost equals $10. Which one of the following is true for this firm?a) it’s profits are 500 $b) it’s profits are -500 $c) it’s profits are -1500 $d) it’s profits are 1500 $arrow_forward1.Explain how the long run differs from the short run in pure competition. 2. Explain how the entry and exit of firms affects resource flows and long-run profits and lossesarrow_forwardExplain the table Output (Units) Total Revenue (£) Total cost (£) Profit (£) Marginal revenue (£) Marginal cost (£) Change in profit (£) 0 0 3 -3 - - - 1 6 5 1 6 2 4 2 12 8 4 6 3 3 3 18 12 6 6 4 2 4 24 17 7 6 5 1 5 30 23 7 6 6 0 6 36 30 6 6 7 -1 7 42 38 4 6 8 -2 8 48 47 1 6 9 -3arrow_forward
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