A perfectly competitive firm produces at an output at which marginal revenue is less than marginal cost. To maximize profit, the firmshould:O produce more.O maintain its level of output.O produce less.www.If the price of output decreases, the firm's optimal level of output will increase(Click to select)increase***stay the samedecreaseSavedK

Perfect competition: A firm in the competitive market is a price taker because it has large number…

A perfectly competitive firm produces at an output at which marginal revenue is less than marginal cost. To maximize profit, the firm should: O produce more. O maintain its level of output. produce less. f the price of output decreases, the firm's optimal level of output will increase (Click to select) increase stay the same decrease V

A perfectly competitive firm produces at an output at which marginal revenue is less than marginal cost. To maximize profit, the firm should: O produce more. O maintain its level of output. produce less. f the price of output decreases, the firm's optimal level of output will increase (Click to select) increase stay the same decrease V

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a competitive firm that is operating in the short run. The firm is maximizing profits and just breaking even. Assume it has to pay a monthly license fee of $100 and that the fee must be paid for as long as the firm operates. What should the firm do to maximize profits in the short run if the price of the license fee increases from $100 to $150? a. increase price Ob. increase output c. reduce output O d. not change output e. both a and c
In the long run, a perfectly competitive firm makes O A) either a positive economic profit or a normal profit. B) zero accounting profit. C) zero economic profit. D) negative economic profit, that is, an economic loss. E) a positive economic profit.
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The figures below show (on the left) two possible demand curves and (on the right) two possible supply curves in the perfectly competitive hamburger market. Price per hamburger 0 A B D₂ D₁ Hamburgers per month Price per hamburger 0 Select one: a. Movement along D₁ from Point A to Point B. b. Demand shifts from D₁ to D₂. F c. Movement along S₁ from Point F to Point G. d. Demand shifts from D₂ to D₁. G Hamburgers per month Assume that people consume either hamburgers or hot dogs. What will be the result of a decrease in the price of hot dogs? Hint: Are hamburgers and hotdogs complements or substitutes? S₂ S₁
Brody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.-Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer. -At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work. -Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200. -Brody's profit-maximizing quantity of saxophones -Brody's loss, completely shaded Quantity Total Variable cost 6 $120 7 $145 8 $165 9 $220 10 $290 11 $390
In the long run, competition among sellers results in all of the following EXCEPT O increases in the price investment increases in the quantity O innovation
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Which of the following is an expression of profit for a perfectly competitive firm? Profit for a perfectly competitive firm can be expressed as ⒸA. Profit=(PxQ)-(TCxQ), where P is price, Q is output, and TC is total cost. OB. Profit=P-MC, where P is price and MC is marginal cost. OC. Profit=PxQ, where is price and Q is output. O D. Profit=P-ATC, where P is price and ATC is average total cost. O E. Profit= (P-ATC) XQ, where P is price, Q is output, and ATC is average total cost.
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For a profit-maximizing price-taker firm, a reduction in the price of a good will cause the marginal revenue for that fiem and the quantity the firm produces to. to Oa Fall; Rise Ob Rise; Fall Oc. Rise; Rise Od. Fall, Fall
$11.00 MC| $10.00 $9.00 ATC $8.00 $7.00 TRAVCI $6.00 $5.00 $4.00 $3.00 2 3 7 9 10 Quantity of Output (q) Pierre is a photographer in a perfectly competitive market. The graph shown above gives his MC, ATC and AVC curves. Suppose the market price is $10.50. How much profit does Pierre make? 22.5 24 20 O18 S per unit