Question 15 of 20(Figure: Determining Industry Cost Characteristics) Short-run and long-run supply curves with short-run marketequilibrium at points A and B are shown in the graph. We can conclude that the industry in the graph is a(n)O Macmillan LearningMacmillan LearningPrice ($)1,000900V5000800700600400300200100oPrice (40 100 2005000400300 O2001000300 400 500Output10100OOASA600 700 800900100 200 300 400 500 600OutputO increasing cost industry.constant cost industry.O market in long-term disequilibrium.O decreasing cost industry.SLR700 800 900

The short run supply curve represents the behavior of firms in the immediate term, considering fixed…

(Figure: Determining Industry Cost Characteristics) Short-run and long-run supply curves with short-run market equilibrium at points A and B are shown in the graph. We can conclude that the industry in the graph is a(n)

(Figure: Determining Industry Cost Characteristics) Short-run and long-run supply curves with short-run market equilibrium at points A and B are shown in the graph. We can conclude that the industry in the graph is a(n)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain the profit and loss possibilities of a price taker firm and graphically draw the supply curve of the firm in the short run only.
2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a) What is the fixed cost? Solve the average variable cost function in the short-run. b) What is the supply function of each firm? c) Solve for the short-run equilibrium outcome: P*, Q* and q*. d) What is one firm's economic profit in this market?
PROBLEM (4) The market for plastic toys is perfectly competitive, and it is composed of many identical firms, each with the total cost function TC(q) = ½ q² + 40q + 2,450 (a) What is the short run shut down price and the long run entry/exit price for this market? (b) Carefully draw the short run supply graph of an individual firm, and separately the long run aggregate (market) supply graph for this industry. (c) What is the optimal quantity to produce for the firm and the corresponding net profit, if the market price is (i) %3D $30? (ii) $70? Now, suppose in addition that the market demand is Q = 18,000 - 100p. (d) In the long run equilibrium, what is the market price and quantity? How many units does each firm in the market produce, and what is its net profit? How many firms are there in the long run equilibrium? (e) Suppose the government imposes a $14 per unit tax on plastic toys. Re-answer part (d) %3D
Advanced Microeconomics, Production Theory: Perfect Competition
Assume that the cost data in the following table are for a purely competitive producer: Average Average Average Total Variable Marginal Cost Total Fixed Product Cost Cost Cost 1 $60.00 $45.00 $105.00 $ 45.00 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 12.00 37.00 49.00 35.00 6. 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 7.50 40.63 48.13 55.00 9. 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $57.00 (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? |(Click to select V output = units per firm (iii) What economic profit or loss will the firm realize per unit of output? |(Click to select v per unit = $ b.…
Mr DIY is a new small scale palm oil supplier. There are many small scale palm oil suppliers in the market. The price of oil palm is solely determined by the market demand and supply. Describe the perfectly competitive market of this industry. As Mr DIY is a new firm in the market, his firm is facing a problem of revenue lesser than the total variable costs. Illustrate the situation with an appropriate diagram(s). Evaluate the situation of this firm and provide one suggestion for the firm to sustain in the long run.
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Assume the natural gas industry is still living with the short-run supply disruption. Then, unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas. graphically depict any changes affecting the market for natural gas and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC curves. market price is always greater than the minimum of the AVC curve.
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