Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctlylabeled diagram must have all axes and curves clearly labeled and must show directional changes.If the question prompts you to "Calculate," you must show how you arrived at your final answer.The table below shows the total costs faced by Dave's General Store for different quantities of GoodX sold.Quantity012345678910Total Cost$100$110$140$190$290$440$640$900$1,230$1,640$2,140Dave's General Store sells Good X in a perfectly competitive market with a downward-slopingdemand curve and an upward-sloping supply curve. The market price is $120 per unit. (g) Now assume that the market in which Dave's General Store operates is in long-run equilibrium.(i) Suppose the rent paid by Dave's General Store decreases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain.(ii) Instead suppose Dave's General Store hires labor in a perfectly competitive market and the marketwage increases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease,or stay the same in the short run? Explain.

In case of Perfect Competition, there are large number of firms producing identical products. An…

(g) Now assume that the market in which Dave's General Store operates is in long-run equilibrium. (i) Suppose the rent paid by Dave's General Store decreases. Will Dave's General Store's profit- maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain. (ii) Instead suppose Dave's General Store hires labor in a perfectly competitive market and the market wage increases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain.

(g) Now assume that the market in which Dave's General Store operates is in long-run equilibrium. (i) Suppose the rent paid by Dave's General Store decreases. Will Dave's General Store's profit- maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain. (ii) Instead suppose Dave's General Store hires labor in a perfectly competitive market and the market wage increases. Will Dave's General Store's profit-maximizing quantity of Good X increase, decrease, or stay the same in the short run? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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