3. The table below shows the Long-Run Total Cost (in thousands) of three firms producing bread at different output levels (in kg). Use the information below to answer the following questions. Q Garden Niya Bread Yap Marbie 1 10 30 10 2 21 45 20 3 33 64 30 4 46 78 40 5 60 85 50 6 75 100 60 7 91 112 70 3. The table below shows the Long-Run Total Cost (in thousands) of three firms producing bread at different output levels (in kg). Use the information below to answer the following questions. Q Garden Niya Bread Yap Marbie 1 10 30 10 2 21 45 20 3 33 64 30 4 46 78 40 5 60 85 50 6 75 100 60 7 91 112 70

3. The table below shows the Long-Run Total Cost (in thousands) of three firms producing bread at different output levels (in kg). Use the information below to answer the following questions. Q Garden Niya Bread Yap Marbie 1 10 30 10 2 21 45 20 3 33 64 30 4 46 78 40 5 60 85 50 6 75 100 60 7 91 112 70 3. The table below shows the Long-Run Total Cost (in thousands) of three firms producing bread at different output levels (in kg). Use the information below to answer the following questions. Q Garden Niya Bread Yap Marbie 1 10 30 10 2 21 45 20 3 33 64 30 4 46 78 40 5 60 85 50 6 75 100 60 7 91 112 70

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 35CTQ: Why will profits for films in a perfectly competitive industry tend to vanish in the long run?

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Similar questions

A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
How does the average cost curve help to show whether a firm is making profits or losses?
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)
What two lines on a cost curve diagram intersect at the zero-profit point?
In the argument for why perfect competition is allocatively efficient, the price that people are willing to pay represents the gains to society and the marginal cost to the film represents the costs to society. Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect me lung-nm average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?
What two rules does a perfectly competitive firm apply to determine its profit-maximizing quantity of output?
Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, What is the right amount of variety? Can there be too many varieties of shoes, for example?
Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?
A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions are able to increase wages for workers?
Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?