10. An industry currently has 100 firms, each of which has fixed cost of $16 and average variable cost as follows: Quantity Average Variable Cost 1 $1 2 2 3 4 4 a. Compute a firm's marginal cost and average total cost for each quantity from 1 to 6. b. The equilibrium price is currently $10. How much does each firm produce? What is the total quantity supplied in the market? c. In the long run, firms can enter and exit the market, and all entrants have the same costs as above. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? Explain your answers.

10. An industry currently has 100 firms, each of which has fixed cost of $16 and average variable cost as follows: Quantity Average Variable Cost 1 $1 2 2 3 4 4 a. Compute a firm's marginal cost and average total cost for each quantity from 1 to 6. b. The equilibrium price is currently $10. How much does each firm produce? What is the total quantity supplied in the market? c. In the long run, firms can enter and exit the market, and all entrants have the same costs as above. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? Explain your answers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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At the current short-run market price, firms will __________ in the short run. In the long run, ____________ the market given the current market price.
12. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost 课后作业: 1 $1 2 3 3 . P298 第12题 4 4 5 5 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market. 查看原圖(152K)
If firms can easily enter and exit a market, then A. firms will earn zero economic profit in the short run. B. firms will produce at minimum average fixed cost in the long run. C. firms will produce where price is greater than marginal cost. D. firms will produce where price is greater than marginal revenue. E. firms will produce at minimum average cost in the long run.
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Price (dollars per soda) 2.50 2.00 1.50 1.00 0.50 Market Price 0 5 10 15 20 25 Quantity (thousands of sodas per month) The supply curve of Coca Cola is given above. The market price is $1.00 per soda. The marginal cost of the 20,000th soda is $0.50. $1.00. more than $1.00. $0.00. S
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13. Firms in Competitive Markets The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. Price and Costs The price of fertilizer must be less than marginal cost. The price of fertilizer must be equal to average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. MC Firm ATC LAVC II II Quantity (? P P₂ Demand 1 Market Quantity S₁ S₂ (?)
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2. Sherry expects to deposit $1000 now, $3000 4 years from now, and $1500 6 years from now and earn at a rate of 12% per year compounded semiannually through a company-sponsored savings plan. What amount can she withdraw 10 years from now? a. Draw cash flow diagram. 4 b. What amount can she withdraw 10 years from now?
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