Pricibles of economics by Betsey Stevenson and Justin Wolfers 1. For each of the following market graphs, describe and graph what will happen if there isfree entry/exit and how you know: (5 pts each)$Avg.costcostInitial firmDemandAvg.Initial firmDemand

To answer the questions regarding how we know what will happen in these markets with free…

Answered: 1. For each of the following market…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 7PA

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Using the figure above, what is the total revenue for the firm?
You own a printing firm. Two of yoursenior managers provide you with advice. Thefirst manager states that your company islosing money for every unit that is printed. Tominimize losses, she advises that you reduceyour production levels. The second managerstates that if your firm sells some more units,the price will cover your increase in costs. Inorder to reduce losses, the second managerrecommends that you should increaseproduction. Explain which manager iscorrect and who is offering the correctadvice?
Shakti Inc. has been granted a patent for its arnica toothache balm. The table to the right shows the demand and the total cost schedule for the firm. What is Shakti's profit minus maximizingoutput? A. 4 units B. 6 units C. 7 units D. 5 units Price per dose (Dollars) Quantity Demanded (Dose) Total Cost of Production (Dollars) $80 0 $80 72 1 82 64 2 88 56 3 100 48 4 124 40 5 164 32 6 208 24 7 268 16 8 340
A trader wants to open an oil shop in the Greater Jakarta area with a choice of the Bogor, Jakarta areaor Bekasi. Each of these area options has a local supplier providingThe price quote for the oil is detailed in the table below. area fixed cost variabel cost Bogor 5.500.000 55.046.00 Jakarta 11.500.000 35.500.00 Bekasi 21.500.000 15.500.00 Question:A. What is the large volume that must be met in order to get economic value per area? Define the volume range for each area.b. Sketch a crossover diagram that illustrates these conditionsc. If in the end the merchant wants to sell as many as 600 cans at a selling price of Rp.60,000 per can, calculate the profit from each area. Where did the trader determine his location?
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The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC 8 MR3 AVC 6. MR2 MR1 Quantity 100 200 300 400 a)At what price will Rahim try to minimize loss by selling eggs in the market? b)At what price will there be a break-even point?
AVC, ATC,MC 110 80 76 " 50 40 30 29 18 MC ATC 1234567H0 11 12 13 14 Output per period O a Loss of $90 O b. Profit of $180 O c. 50 Od. Profit of $6300 The Competitive Industry and Firm Refer to the figure above to answer this question for a representative firm in a perfectly competitive market. Suppose that the market price is $70. What is the firm's maximum profit (or minimum loss)?
un x SCC PortalGuard -SCC Portal Lo X Assignments: Microec onomics Chapter 12 HW ect.mheducation.com/flow/connect.html Saved In the News: What's Behind Starbucks' Price Hike? The Coffee Company Will Raise Drink Prices in October, Even as Other Chains Crowd the Market with Similar (and Cheaper) Products Starting on Cctober 3, the prices on lattes, cappuccinos, drip coffee, and other drinks will go up 5 cents at company-operated stores in North America. Starbucks is also jacking up the price of its coffee beans by roughly 50 cents per pound, or an average of 3.9 percent. The timing is certainly odd. For a while now, Starbucks has been struggling with labor disputes. Rivals McDonald's, Dunkin' Donuts, and Canadian restaurant chain Tim Horton's are steaming into its turf.... A Confident Company If Starbucks were really worried about any of these issues, the last thing its senior execs would consider is a price hike. In fact, Starbucks' dominant market position gives it unique pricing…
Consi der Hhe fallowing » The inverse femand function is givan by p= 30-@ Cournet medel. where Q = E,+ * Firm 13 marginal cost is $6lei=6). Fivm 2 uses a nem techaulagy There is no that it's marginal cost is $3 (6=3). fixed cort So The fwo fims chooce thair and Compete only Jame). Answer the follming puestions. O Derive Firm 1 amd Firm 2% vation furtions reupertivaly. o Solve Hhe Harh equilibrium ( ", q") O What is He equilibrinm level for eah firm. quenti tias simultaneculy (So it's a one- shot simultaneaus once price and what is Hhe profit Suppore there is Iim 2. Wlhat is the highert price that Firm I is willing to paj for this new o Mow let's chauge the setup from Coumet campetition to Bertrand Competitin, while maintaining all efther aJAump tins. What is He equilibium price? O Suppon the fwe finms engage in Betrand (ompetition What is the hijhut price that Fim 1 o milling for He new feihnly? * market for the teihue lagy uped by to
4. Elasticity and total revenue The following graph shows the daily demand curve for bippitybops in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 120 110 100 Total Revenue 90 B0 70 50 40 30 20 10 Demand 10 20 30 40 50 70 90 100 110 120 QUANTITY (Bippitybops) PRICE (Dollars per bippitybop)

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1. For each of the following market graphs, describe and graph what will happen if there is free entry/exit and how you know: (5 pts each) $ Avg. cost cost Initial firm Demand Avg. Initial firm Demand