A) Firms are able to make increased economic profit which can be used for innovation. B) There is more social pressure on firms with large market power to innovate OC) Increased market power means there is more competition, leading firms to compete more. D) Production is more expensive for firms with more market power than firms with less market power, leading them to look for new ways to produce. Question 2 6 Which of the following is NOT true about large firms? O A) Large firms have advantages in financial markets. O B) Large firms cannot exploit economies of scale, so they must use innovat reduce cost

A) Firms are able to make increased economic profit which can be used for innovation. B) There is more social pressure on firms with large market power to innovate OC) Increased market power means there is more competition, leading firms to compete more. D) Production is more expensive for firms with more market power than firms with less market power, leading them to look for new ways to produce. Question 2 6 Which of the following is NOT true about large firms? O A) Large firms have advantages in financial markets. O B) Large firms cannot exploit economies of scale, so they must use innovat reduce cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 8 Which of the following is true for monopoly and perfect competition? O A. The demand for the individual firm's product is perfectly elastic. O B. Economic profits can be sustained indefinitely over time. OC. Marginal revenue is horizontal at the industry equilibrium price. O D. Profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost
1. In principle, how do we determine a perfectly competitive firm's profit-maximizing output and maximum profits given information about the market clearing price, and about the marginal cost and average total cost curves of the firm? Explain in words. 2. Can a firm make losses by producing the rate of output at which marginal revenue equals marginal cost? Why? 3. What determines the perfect competitor's supply curve? How is the industry supply curve found? 4. Why would it be economically inefficient for a firm to charge the price of a good greater than its marginal cost? 5. What is a price taker? Discuss the assumptions used to obtain the perfectly competitive model. 6. Why would economies of scale be a barrier to entry? 7. What is the main difference between the demand curves for the perfect competitor and the monopolist? 8. How does a monopoly maximize profits? What price does it charge? 9. Explain what will happen if firms in a monopolistically competitive industry are earning…
ANSWER THE MULTIPLE CHOICE QUESTION.
Assume that the market for house cleaning is perfectly competitive. If a single firm cleans 22 apartments per week, and there are 99 identical firms in the market, how many markets are getting cleaned weekly? O a less than 2178 because demand slopes down. O b.4356 Oc 2614 O d. 2178 O e. it is impossible to say anything about the market output based on information about single firms.
Pls solve all questions
M/c question - Micro 23) When a firm in a competitive market receives $5000 in total revenue, it has a marginal revenue of $100. What is the average revenue, and how many units were sold? A. $100 and 100 units B. $100 and 50 units C. $50 and 50 units D. $50 and 100 units 22) Scenario 14-1 Assume a certain firm is producing 1000 units of output (so Q = 1000). At Q = 1000, the firm’s marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. Refer to Scenario 14-1. At Q = 1000, what is the firm’s profit? A. $1000 B. -$200 C. $3000 D. $4000
QUESTION 46 The term market failure refers to a. a market that fails to allocate resources efficiently. b.an unsuccessful apvertising campaign which reduces demand. Oc. ruthless competition among firms. O d. a firm that is forced out of business because of losses.
A9 The characteristics of a "perfectly competitive" market require that there is 1) a large number of firms, 2) producing products that are identical across firms, 3) in an industry where there are no barriers to entry. It's unlikely that any industry accurately reflects these extreme assumptions, but what industries can you think of that do display these characteristics at least to some extent? Try to identify the limits of your example in reflecting "perfect" competition.
4) MULTIPLE CHOICE (identify the one best answer below and explain your reasoning for each option): Readthe question carefully! If a profit-maximising, perfectly competitive firm is producing a quantity at whichprice is higher than average total cost but lower than average variable cost, thena. keep producing both in the short run and in the long runb. keep producing in the short run but exit the market in the long runc. shut down in the short run but return to production in the long rund. shut down in the short run and exit the market in the long rune. Such situation cannot occur.
4. The demand for an individual firm's output depends on the demand for the industry's output, the number of firms in the industry, and the structure of the industry. O a. True Ob. False
Suppose that the firm in a competitive market faces the following revenues and cost: Quantity Total Revenue Total Cost 0 $0 3 1 $7 5 2 14 8 3 21 12 4 28 17 5 35 23 6 42 30 7 49 38 In order to maximize profits, the firm will produce__ a. 6 units of output because marginal revenue equals marginal cost. b. 8 units of output because marginal revenue equals marginal cost. c. 4 units of output because marginal revenue exceeds marginal cost. d. 1 unit of output because marginal cost is maximized.
1. Explain the relationship between price, marginal revenue and average revenue for a perfectly competitive firm? 2. When does a perfectly competitive firm maximize their profits? What they should do if at their current production level their marginal revenue is greater than marginal cost? 3. Explain the difference between a shut-down decision and exiting decision for a competitive firm? When and how they make such decision? 4. Refer to the graph below: Price 19 18 MC 16 12 ATC 1 2 3 43 6 1 8 Quantity In the above graph, assume that the price per unit is $10. Based on this information calculate: a. Profit maximization quantity b. Total revenue at that level c. Total cost at that level d. Profit or loss for this firm (if any) Please refer to the discussion board requirement announcement before posting. First post due on Thursday, May 6th, and reply to two other student's posts due on Sunday, May 9th.