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

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 3CQQ

See similar textbooks

Related questions

Q: 1. Suvreen runs a flower shop in a perfectly competitive market and sells each flower bouquet for…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Question 42 If a perfectly competitive firm finds that price is less than average total cost, but…

A: Answer: If the price is less than the average total cost it means the firm is earning losses. But it…

Q: 19. Refer to the following diagrams which pertain to a purely competitive firm producing output q…

A: Pure market: It refers to a market situation under which the large producers were unable to…

Q: consider a perfectly competitive market with identical firms. Each firm has the usually shaped cost…

A: Under the perfectly competitive market: Price = MR = AR Profit maximization: MR = MC

Q: 28. By increasing its output from Q1 to Q2, the firm A. Reduces its marginal revenue. B. Increases…

A: When the long-run average cost curve falls due to a growth in output, economies of scale will take…

Q: The firm Durham Co. operates in a competitive market because ODurham Co. is one of a few firms and…

A: In competitive market, there are large number of firms in the market

Q: es The table below shows the total cost (TC) and marginal cost (MC) for Baker Street, a perfectly…

A: A large number of sellers and buyers with homogeneous products are selling in the markets described…

Q: QUESTION 16 Jose's restaurant operates in a perfectly competitive market. At the point where…

A: In the perfectly competitive market, if a firm is producing at a level where MR equals MC, this…

Q: Price and costs $30 $25 $20 $17.50 $15 $10 $5 0 $ $4.40 3.25 MR MC 1 2 3 4 5 ATC Quantity…

A: A Perfectly Competitive firm maximizes profit by producing output at a level where Price equals…

Q: Question 3: Cost Table Question Complete the following short-run cost table for a perfectly…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Output (units per day) The above figure illustrates a perfectly competitive firm. If the market…

A: Perfect competition is a market form where there are large number of buyers and sellers selling…

Q: Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost…

A: (a) Quantity TVC MC 0 0 NA 1 100 100 2 180 80 3 220 40 4 300 80 5 390 90 6 500 110…

Q: . Calculate profit for each quantity. How much should the firm produce to maximize profut ? b.…

Q: 13. At what price the competitive firm is making a zero profit? Price and cost MC ATC AVC с

A: Perfect competition is an idealized economic concept that describes a market structure with the…

Q: 12. If the price is less than average total cost for a perfectly competitive firm in the short run,…

A: Perfect competition is the market structure where there are large no of buyers and sellers selling…

Q: The table below displays cost information for a firm operating in a perfectly competitive market.…

A: The total cost of the firm is divided by the fixed cost and the variable cost. variable cost changes…

Q: Price 8 7 6 5 4 3 I I 10 11 12 13 MC ATC AVC Quantity

A: The market price is $4, which is below the firm's average variable cost at all levels of output.…

Q: A perfectly competitive firm will shutdown if its a. Loss is greater than the fixed cost b. Marginal…

A: A perfectly competitive firm will shutdown if its Average total cost exceeds its average variable…

Q: A perfectly competitive firm produces 1000 units of burger in the long run. The marginal revenue is…

A: Perfectly competitive firm- It accepts equilibrium price at which it sells goods and it is a price…

Q: 24. The figure to the right illustrates the cost curves of a perfectly competitive firm. If the…

A: In perfect competition there are many firms producing identical goods

Q: 1. The following table has information on the revenues and costs for Tom's tennis ball manufacturing…

A: A perfectly competitive market is one where there are large number of buyers and sellers and the…

Q: 29. In the long run, a profit maximizing firm will choose to exit a market when a. fixei costs…

A: In the short-run, a firm exits a market if it is not able to cover its variable costs, i.e., it…

Q: Suppose a firm operating in a competitive market has the following cost curves: 20 MC 18 16 14 12…

A: Perfect competition is the type of market structure where there are large number of buyers and…

Q: 3. Apples are produced in a perfectly competitive industry. Assume that there are 100 identical…

A: Part (a) In case of perfect competition , the supply curve is given by marginal cost curve above…

Q: 7. A firm encounters its 'shutdown point' when

A: To find : When do firm encounter it's shutdown point.

Q: The figure above shows the marginal revenue and long-run cost curves for a perfectly competitive…

A: A perfectly competitive firm operates in a market with a large number of identical firms, each…

Q: ATC Price MC AVC 8. 7- 9. 10 11 12 13 Quantity The graph shows the cost curves of a firm in a…

A: Perfect competition is a market structure where there are large number of buyers and sellers in the…

Q: 5. Profit maximization and shutting down in the short run The following graph plots daily cost…

A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…

Q: Figure 16-12 Price 100 90 80 MC 'ATC 70 Fog 85 50 40 36 30 20 10 MR 4 12 16 20,24 28 32 Buaxtity d)…

A: Here, the given graph explains the situation under a firm with less competiton perfectly competitive…

Q: A perfecty competitive fim is producing at an output level of 1200 where marginal revenue is $15,…

A: Profits refer to the excess of earning or revenues of a firm over their spending or cost of…

Q: 1. The profit maximizing output for this firm is . 2. In the short-run, this firm will earn $…

A: The monopoly is a market structure which has a single seller and many buyers in the market. The…

Question

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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Your company operates in a perfectly competitive market. You have been told that advertising can help you increase your sales in the short run. Would you create an aggressive advertising campaign for your product?
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
29. In the long run, a profit maximizing firm will choose to exit a market when a. fixei costs exceed total costs O totai revenue from production is less than total costs c average fixed cost is rising d. marginal cost exceeds marginal revenue at the current level of production
Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:a. What is the profit-maximizing level of output? Calculate Apex’s profit.b. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?c. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?d. Comment on your answers to parts (2) and (3
7
17. The firm Durham Co. operates in a competitive market because ODurham Co. is one of a few firms and sells a product different from other firms in the market ODurham Co. can influence the market price and entry/exit from the market is easy ODurham Co. is one of many firms selling the same product and, is a price taker ODurham Co. is one of a few firms selling the same product and, market entry is blocked
Please solve the question on the word
12. If the price is less than average total cost for a perfectly competitive firm in the short run, then the firm a. is earning a positive economic profit. b. should continue to operate, as long as price is equal to or greater than average variable cst. c. should certainly shut down. d. should continue to operate, as long as price is equal to or greater than average fixed cost. e. is making zero economic profit.
Price 8 7 6 5 3 I I I II 1 O Choose one: 10 11 12 13 MC 11/05/18 ATC AVC Quantity The graph shows the cost curves of a firm in a competitive industry. The market price is $4. In the short run, the firm should A produce the output at which MRMC and earn a profit. B. produce the output at which MR MC and suffer a loss. C. shut down the operation D. There is not enough information to answer the question.
please type answer
4. A competitive firm’s short-run supply curve is its________ cost curve above its ________ cost curve.a. average total, marginalb. average variable, marginalc. marginal, average totald. marginal, average variable
1. Suvreen runs a flower shop in a perfectly competitive market and sells each flower bouquet for $50. Suvreen's flower shop has a fixed cost of $300 and the following table shows her total cost schedules No. of Total Cost flower (S) bouquets 6 445 7. 485 530 9 580 10 635 11 695 a) How many bouquets should Suvreen sell to maximize profir? b) Calculate Suvreen's profit or loss at the chosen quantity from part (a) c) Find the price at nhich the shop may decide to shut down in the short run d) What is the Break-even price for the firm?