24. New firms will exit a perfectly competitive market when: Average variable costs are less than average total costs b. Price is greater than average variable costs O Marginal revenue is greater than average total costs in the short run d. Price is less than average variable costs

24. New firms will exit a perfectly competitive market when: Average variable costs are less than average total costs b. Price is greater than average variable costs O Marginal revenue is greater than average total costs in the short run d. Price is less than average variable costs

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 4 13 12 10 14 8 6 4 2 MC 1 2 3 QUANTITY ATC AVC 5 Refer to Figure 14-1. If the market price is $5, the firm will earn a. negative economic profits in the short run but remain in business. b. negative economic profits and shut down. c. zero economic profits in the short run. O d. positive economic profits in the short run.
Use Figure 7, which depicts the cost curves of a perfectly competitive firm, to answer questions 34 and 35. Price (dollars per unit) 22621 23 11 Figure 7 14 17 19 MC ATC AVC Quantity (units) 35. The shutdown point occurs at a price of A. $11.00. B. $12.00. C. $16.00. D. $22.00. MR 34. At the profit-maximising level of output, the firm is A. Incurring an economic loss equal to $119.00. B. Incurring an economic loss equal to $123.50. C. Incurring an economic loss equal to $187.00. D. Making zero economic profit.
Figure 1 contains the relevant cost curves for a perfectly competitive firm 961 Price and Cost 900 800 700 600 500 400 300 200 100 0 100 200 300 400 500 600 700 800 900 860 Based on Figure 1 MC Quantity 1. Find breakeven price and quantity. Explain your answer 2. Indicate shutdown price and quantity. Explain your answer 3. Sketch the profit's area when the price is 900. 4. In the short run, if the market price is higher than 400 but less than 600, will individual firms have a profit or a loss? Explain.
Consider the total revenue (TR), total cost (TC), and total variable cost (TVC) curves shown at right. In the short run, this perfectly competitive firm OA. should exit because it is losing money. B. should shut down because its profit is zero. OC. should increase the price. OD. could shut down. OE. is breaking even. Price (5) Quantity TC TVC TR
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Consider the following figure for a perfectly competitive firm in the short run. Price, Costs MC ATC AVC 30 26 20 12 ------ 10 ..---- .---- 8 12 21 30 32 40 Output Suppose the industry price is $20. If the firm produces its profit-maximizing or loss-minimizing output, then it will make a equal to Loss; $420 Profit ; $240 Loss ; $180 Loss; $240
Use Figure 11-5 to answer the following question(s). Cost and Revenue In long run equilibrium, this competitive firm will face a price of $6,200 units $10, 250 units $20, 300 units. $16, 300 units. $20 11 71 10 b 6 a Figure 11-5 טן MC MR ATC AVC 200 250 300 Quantity and produce 13
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How to sovle these? What's the right answer?
Refer to the diagram to the right which shows cost and demand curves facing a profit - maximizing perfectly competitive firm. At price P3¹ the firm would O A. lose an amount less than fixed costs. OB. break even. OC. lose an amount more than fixed costs. D. lose an amount equal to its fixed costs. C P Price and cost U D 0 a ठ 1 C d MC e f Q3 Q4 Quantity ATC AVC g Q
11. The competitive firm should shut down if the price level falls below the OMC = MR Onone of the answers is correct AVC O ATC PARDUO Jan S AFC FOR M
18. Select all that apply. In a perfectly competitive market, MR equals Price Average revenue Total revenue Δ in total revenue / Δ in quantity