(Figure: Profit-Maximization for Fabulous Finn's Flower Firm in the Short Run) Use Figure: Profit-Maximization for Fabulous Finn's Flower Firm in the Short Run. If the market price is Pa: Price, ATC, AVC, and MC (per unit) P2 91 92 91 Quantity (per perlod) firms will leave the industry, and the price will fall in the long run. there will be economic profits, and firms will enter the industry in the long run. the market supply curve will shift to the left, and price will fall in the long run. O the firm will produce q4 O O

(Figure: Profit-Maximization for Fabulous Finn's Flower Firm in the Short Run) Use Figure: Profit-Maximization for Fabulous Finn's Flower Firm in the Short Run. If the market price is Pa: Price, ATC, AVC, and MC (per unit) P2 91 92 91 Quantity (per perlod) firms will leave the industry, and the price will fall in the long run. there will be economic profits, and firms will enter the industry in the long run. the market supply curve will shift to the left, and price will fall in the long run. O the firm will produce q4 O O

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 the perfectly competitive market for sports jackets. The following graph shows the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves for a typical firm in the industry.
Please answer F and show steps for the graph
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What is the profit maximizing quantity of output? What price should the firm charge for its output? For that price and quantity does the firm make economic profit, economic loss or breaks even? How do you know? Explain your answer.
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Suppose there are 5 firms in this industry, each of which has the cost curves previously shown.
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can you draw a diagram of long run industry supply curve, with price on the y-axis and quantity on the x-axis, and a downward-sloping curve showing the relationship between price and quantity supplied? then also draw another diagram of long run industry supply curve, with price on the y-axis and quantity on the x-axis, and a downward-sloping curve showing the original relationship between price and quantity supplied, and a second, upward-sloping curve showing the new relationship between price and quantity supplied after the increase in the price of oil?