5. The short-run total cost function for a perfectly competitive firm is SRTC = 500 + 3q − 5q² + q³.Suppose that, at its short-run profit maximizing quantity, each firm is making a loss but choosesto stay open. Which of the following is/are necessarily true?a. MR = 3-10q + 3q²b. AR < 500/q+3-5q + q²c. P>3-5q+q²d. Both A and B are true.e. All of the above are true.

Thus, we can only draw the conclusion that statement (b) (AR < 500/q + 3 - 5q + q^2) is probably…

Answered: 5. The short-run total cost function…

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 3PA

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4. The market for sugar consists of 3,500 identical, perfectly competitive firms, each with the following short-run total cost function: SRTC =1,500 + 35q². The market demand curve for sugar is Q= 11,200 -30P. What is each firm's maximum short-run profit? a. $0 b. $280 c. -$1,080 d. -$1,360 e. -$1,500
20. The table below has some information about an unnamed firm in an unknown competitive industry. TC MC P TR MR 100 n/a 80 n/a 1 150 80 2 202 80 3 257 80 4 317 80 385 80 6. 465 80 7 562 80 8. 682 80 Fill in the MC, TR (total revenue), and MR columns. What quantity should the firm produce if it has to pick a q > 0? (if two options yield equal profit pick the larger one) 21. (continued) Will there be entry, exit, or neither in this industry in the long run? a. entry b. exit c. neither
Perfect competition is an economic term that refers to a theoretical market structure in which all suppliers are equal and overall supply and demand are in equilibrium. Figure 23. 1 shows the price, marginal cost and average cost curves facing a perfectly competitive firm in the short run. Figure 23.1 Cost, pnce (Rand) B. R800 C. R960 20 D. R720 200 60 80 Output per day 100 MC AC What is the total revenue of the profit-maximising firm in the short run? A. R2 000 Price AVC @ K
The diagram below shows the short - run cost curves for 3 perfectly competitive firms in the same industry. Firrm A Firm B Firm C ATC MC ATC MC MC ATC p. Qc Output Output Output FIGURE 9- 6 Refer to Figure 9 - 6. Which of the following statements about Firms A, B and C is true? A. Firms A, B and C are earning profits. O B. Firms A, B and C are breaking even. O C. Firm A is suffering losses, Firm B is breaking even, and Firm C is earning profits. OD. Firm A is breaking even, Firm B is suffering losses, and Firm C is earning profits. E. Firm A is earning profits, Firm B is breaking even, and Firm C is suffering losses. O O O O O
1. Below is a demand schedule facing an individual firm. Complete the table by computing average revenue, total revenue, and marginal revenue. Then answer the following two questions: (a) How can you tell whether a firm is operating in a market that is perfectly competitive? (b) What relationship exists between average revenue and marginal revenue? Price $30 30 30 30 30 30 30 Quantity Average demanded revenue олдWN -о 1 2 3 4 5 6 $ Total Marginal revenue revenue $ $
10 If it is not in long-run equilibrium, what will happen in this industry to restore long-run equilibrium? 11 In long-run equilibrium, what is the firm's profit-maximizing quantity?
Convey how purely competitive firms can use the total-revenue–total-cost approach to maximize profits or minimize losses in the short run.
7. There are 1,000 firms in a perfectly competitive market. Each faces the same short-run total cost function: SRTC = 50 + 10q + 5q². What is the minimum price at which a firm will stay open in the short run? a. P= $0 b. P = $5 c. P= $10 d. P = $20 e. P = $50
2 Refer to the table below, which presents a cost schedule for a perfectly competitive firm. Quantity 10 11 12 13 14 15 16 FI ( If the price that the firm charges for its output is $9, how many units will this firm produce? 11 2 16 S 14 0 W F2 X = 3 20, E D F3 JAN 5 $ 4 888 R F F4 % 5 30 T F5 G ^ 6 F6 Y Total cost ($) 13 H 25 36 46 MacBook Air & 7 55 63 70 A F7 U tv NA * 8 J ➤ll FB ➤➤ ( 9 D 1 F9 O -0 O W F10 K L Aa P 4) zoom F11 + { [ Next SA ) F12 11 ( M htm delete
Question 19 Consider the table below which presents information about a competitive firm: FIRM D PRICE OUTPUT TOTAL REVENUE TOTAL COSTS TOTAL FIXED COSTS TOTAL VARIABLE COSTS AVERAGE TOTAL COSTS ? 700 $2,800 $2,975 ? $2,450 ? AVERAGE VARIABLE COSTS ? MARGINAL COST $4.00 Is this firm maximizing short run profits (minimizing short run losses)? a) No. ATC is greater than P. b) Yes. P MC. c) Yes. PAVC. 0 / 10 points
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