21.The cost curves for an individual firm are given in the figure. In Figure (A), highlight the firm’s short-run supply curve. In Figure (B), highlight the firm’s long-run supply curve.
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21.The cost curves for an individual firm are given in the figure.
- In Figure (A), highlight the firm’s short-run supply curve.
- In Figure (B), highlight the firm’s long-run supply curve.
![Price/Cost
(A)
MC
Quantity
(B)
Price/Cost
MC
AVC
Ï
Quantity
ATC
AVC
ATC](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1b94d3bc-2b1b-4a50-bde5-76c25cf1444b%2F11063542-ba7e-47eb-b158-64dfd668317b%2Fw95nw6_processed.png&w=3840&q=75)
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- 5. Profit maximization and shutting down in the short run The following graph plots daily cost curves for a firm operating in the competitive market for air fryers. PRICE (Dollars per thyer 8 & 0 Price (Dollars per fryer) 25.00 70.00 MC 100.00 ATC AVC Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) QUANTITY (Thousands offers) Quantity Total Revenue Fixed Cost (Fryers) (Dollars) 30,000 (Dollars) 1,600,000 1,600,000 1,600,000 Variable Cost (Dollars) Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's…COURSE: ECONOMICS A competitive firm has a marginal cost function CM = 6 + 4q and market price is P = $12.a) What the firm's level of output?b) What producer surplus? Hint: graph and computec) Assume that Average Variable Cost is AVC = 6 + 2q and Fixed Costs FC = $6; does firm have a positive, negative or zero profit? ExplainThe short-run supply curve for a price-taking firm is given by: Select one: a. its short-run marginal cost curve above average fixed cost b. its entire short-run marginal cost curve c. its short-run marginal cost curve above minimum average total cost d. its short-run marginal cost curve above minimum average variable cost e. the positively sloped portion of its average cost curve
- To the right is the average total cost curve for a competitive firm. What is the relationship between the average total cost curve (ATC) and the marginal cost curve (MC)? 1.) Using the 3-point curve drawing tool, draw the marginal cost curve for this firm in a competitive market. Label your curve 'MC'. Carefully follow the instructions above and only draw the required object. Price Quantity Average Total Cost Q GThe following graph plots daily cost curves for a firm operating in the competitive market for demin overalls. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per overalls) 50 45 40 35 15 10 5 0 0 2 MC ATC AVC 10 12 4 8 14 16 QUANTITY (Thousands of overallses per day) 18 20 In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of The rectangular area represents a short-run Profit or Loss On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. of $ overallses. thousand per day for the firm.Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 Profit or Loss 40 35 30 АТС 25 20 15 10 AVC MC 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Shirts) PRICE AND COST (Dollars per shirt)
- 4. Profit maximization and shutting down in the short run Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 70 60 50 ATC 40 30 AVC 20 MC 10 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of sweaters) PRICE (Dollars per sweater)Figure: Cost Curves for Corn Producers Price, cost of bushel $30 26 MC 22 18 ATC AVC 14 10 1 3 4 7 Quantity of corn (bushels) Reference: Ref 12-3 (Figure: Cost Curves for Corn Producers) Look at the figure Cost Curves for Corn Producers. The market for corn is perfectly competitive. If the price of a bushel of corn is $10, in the short run, the farmer will produce of corn and earn an ec omic equal to 2 bushels; profit; $0 2 bushels; loss; just more than $80 per bushel 3 bushels; profit; loss, -$15 4 bushels; profit; just less than $80 per bushel“That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost curve constitutes the shortrun supply curve for the firm.” Explain using a graph and words.
- PRICE (Cents per bushel) COST (Cents per bushel) 100 90 80 70 60 50 ATC 40 30 20 10 AVC MC 0 5 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. 1. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) 2. Place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 90 80 60 30 20 2 2 2 2 8 8 2 2 2 2 ° 0 Demand 350 700 1050 1400 1750…9. The long-run supply curve in different cost industries The following graph shows the market for milk. Initially, the market is in a long-run equilibrium. Suppose that a change in tastes resulted in a leftward shift in demand. On the following graph, shift the demand or supply curve to reflect this change in tastes. Then use the grey point (star symbol) to indicate the new short-run equilibrium. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per gallon) Short-run Supply Demand Short-run Supply Short-run Equilibrium Demand Long-run Equilibrium 0 2 10 Long-run Supply QUANTITY (Thousands of gallons) In the short run, firms will . In the long run, the supply curve will On the previous graph, show the shift in the supply curve and then use the purple point (diamond symbol) to indicate the resulting new long- run…4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
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