Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry supply curve is not the long-run industry marginal cost curve because OA. production will only occur along the long-run marginal cost curve for prices above average variable cost. B. at prices above the minimum long-run average cost of production, firms will exit the industry. C. production will only occur along the long-run marginal cost curve when profits are earned. D. firms cannot change fixed inputs in the long run, resulting in an industry supply curve that equals a short-run marginal cost curve. E. at prices above the minimum long-run average cost of production, firms will enter the industry.

Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry supply curve is not the long-run industry marginal cost curve because OA. production will only occur along the long-run marginal cost curve for prices above average variable cost. B. at prices above the minimum long-run average cost of production, firms will exit the industry. C. production will only occur along the long-run marginal cost curve when profits are earned. D. firms cannot change fixed inputs in the long run, resulting in an industry supply curve that equals a short-run marginal cost curve. E. at prices above the minimum long-run average cost of production, firms will enter the industry.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q+Q² +225 Each firm's marginal revenue is $240. a. Find the profit maximizing level of output. b. Is this a short-run or long-run situation? How do you know? c. Assuming that this firm's total cost curve is the same as all other producers, find the long-run price for this good.
A perfectly competitive firm's short-run supply curve is the same as Selected Answer: b. the market demand curve. Answers: a. the supply curve of all the other firms in the industry. b. the market demand curve. c. the marginal cost curve. d. the portion of its average variable cost curve above the average total cost curve. e. the portion of its marginal cost curve above the minimum average variable cost.
In perfect competition, the price of the product is determined where the industry Select one: a. supply curve and industry demand curve intersect. b. elasticity of supply equals the industry elasticity of demand. c. average variable cost equals the industry average total cost. d. fixed cost is zero.
Using diagrams derive a long-run market supply curve for a constant-cost industry, a decreasing-cost industry.
At what point should firms shut down in the short run? a. when marginal revenue equals marginal costs b. when average revenue is below average costs c. when average revenue is above average total cost d. when average revenue is below average variable costs
Explain the two concepts listed below and draw a diagram to show a long-run supply curve associated with each. What are the possible causes, respectively? a. Increasing-cost industry b. Decreasing-cost industry
If the price that a firm with no market power receives is $10, its minimum AVC is $8 and its minimum ATC is $15 then Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a. the firm will make a loss and shut down immediately b. the firm can make a profit c. it will make a loss and choose to continue to produce in the short run d. the firm enjoys increasing returns to scale. e. None of the above.
37) In a perfectly competitive industry, the market price of the product is $15. Firm A is currently producing 300 units. The firm's marginal cost is $15, its fixed costs amount to $1000 and its average variable cost equals $10. Which one of the following is true for this firm?a) it’s profits are 500 $b) it’s profits are -500 $c) it’s profits are -1500 $d) it’s profits are 1500 $
Suppose a firm in a perfectly competitive industry is currently producing output at its profit-maximizing quantity. If the firm's marginal cost is less than its average total cost, MC < ATC, the firm will earn ________ profits. a.negative b.positive c.zero d.break-even
Refer to the diagram to the right which shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. What is the amount of its total fixed cost? OA. $1,000 B. $1,440 OC. $2,520 OD. It cannot be determined. Price and cost (5) 40.50 36.00 30.00 28.00 130 180 Quantity MC 240 ATC AVC MR
Below is a graph of price and cost curves for a perfectly competitive firm that explains the profit/loss states of three different price levels. a. At what quantity and price the firm will maximise its profit and calculate the total revenue, cost and profit. b. At what quantity and price the firm will minimise its loss and calculate the total revenue, cost and minimum loss. c. At what price the firm will decide to shut down firm and justify your answer.
Discuss the shape of the long-run supply curve in a perfectly competitive market. The long-run supply curve is A. an upward-sloping line equal to the sum of the portion of each firm's marginal cost curve that is above minimum average variable cost. B. a horizontal line equal to the minimum point on the typical firm's average total cost curve. C. an upward-sloping line equal to the sum of each firm's marginal cost curve. D. a horizontal line equal to the minimum point on the typical firm's average variable cost curve. E. an upward-sloping line equal to the sum of each firm's supply curve. Suppose that the perfectly competitive market illustrated in the graph to the right is initially in long-run equilibrium (at P₁) and then there is a permanent decrease in the demand for the product (to D₂). Show how the market adjusts in the long run. 1.) Use the line drawing tool to add either a new demand curve or a new supply curve showing the market in long-run equilibrium. Properly label this…