Principles of Microeconomics California Edition 2nd Edition
2nd Edition
ISBN: 9780393622089
Author: Dirk Mateer, Lee Coppock
Publisher: W. W. Norton
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Question
Chapter 9, Problem 9SP
To determine
Identify whether the given statement is agreeable or not.
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Students have asked these similar questions
Suppose you are operating a firm with a given fixed cost and product market price. If the market for your product is perfectly competitive, how will you determine your marginal cost, marginal revenue and average revenue? Explain with the help of an example.
“The profit-maximizing (or loss-minimizing) perfectly competitive firm will want to produce the quantity of output at which the difference between MR and MC is greatest.” Do you agree or disagree with this statement? Explain your answer.
“If Conagra is a competitive firm, it will never operate at an output where its average total cost curve is downward sloping.” True or false? Explain.
I think it's false, but I don't know why though
Chapter 9 Solutions
Principles of Microeconomics California Edition 2nd Edition
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- A perfectly competitive firm will maximize its profit when marginal revenue is greater than marginal cost. True or False?arrow_forwardWhat is the formula for profit maximization by firm ? Why does this result in the marginal cost curve becoming the same as the supply curve for firms in perfect competition? what is the difference between the short run and long run ? Why does this difference matter in our discussion of firm behavior?arrow_forwardThe graph shows the marginal cost (MC), average total cost (ATC), and marginal revenue (MR) curves for a perfectly (or purely) competitive firm. Note, for such firms, the demand (D) curve is the same as the MR curve. Answer two questions, specifying to at least one decimal place. How many units should this firm produce to maximize profit? number of units: What price will the firm receive for each unit at the profit maximizing level out output? $ MC/MR $12 9.7 5.6 D=MR MC ATC 6.6 10.2 12 16 Quantityarrow_forward
- The connection between marginal revenue and price depends on a business's competitive environment. Why are marginal revenue and price the same for a business that is price taker in perfect competition ? Why is marginal revenue less than price for a business that is a price maker?arrow_forwardFor a perfectly competitive firm, what is the relationship between Price and Marginal Revenue?arrow_forwardWhat is the condition for profit maximization for a pure competitive firm?arrow_forward
- According to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?arrow_forwardIn long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?arrow_forwardThe graph attached illustrates the Demand, Marginal Revenue, Marginal Costs, Average Total Costs and Average variable Cost curves for a firm in a perfectly competitive market. What is the breakeven price? Explain your answer. What is the shot down price? Explain your answer.arrow_forward
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