Given the information in the table is this a competitive or non-competitive firm? In the short run, how many units should the firm produce to maximize its profit? Output Total Revenue Marginal Cost $0 $6 $1 2. $12 $2 $18 $3 4. $24 $5 $30 $7 O A. non-competitive; 3 O B. non-competitive; 0 OC. competitive; 4 O D. competitive; 5 O E. competitive; 0 O F. non-competitive; 5 O G. there is not enough information to determine whether it is a competitive or non-competitive firm; 4

Given the information in the table is this a competitive or non-competitive firm? In the short run, how many units should the firm produce to maximize its profit? Output Total Revenue Marginal Cost $0 $6 $1 2. $12 $2 $18 $3 4. $24 $5 $30 $7 O A. non-competitive; 3 O B. non-competitive; 0 OC. competitive; 4 O D. competitive; 5 O E. competitive; 0 O F. non-competitive; 5 O G. there is not enough information to determine whether it is a competitive or non-competitive firm; 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm facing a demand curve will have zero quantity demanded if it raises its price above the market price. a. perfectly elastic O b. relatively elastic O c. relatively inelastic O d. perfectly inelastic A perfectly competitive firm is breaking even. In the short run it should In the long run it should a. produce where MC = MR; keep the same production level O b. produce where MC = MR; leave the industry O c. shut down; exit the industry O d. shut down; expand
A perfectly competitive firm should shut down in the short-run if price falls below the minimum of A) average variable costs. B) marginal revenue. C) fixed costs. O D) average total cost. E) marginal cost.
The optimal output rule for a perfectly competitive firm is to produce that quantity where A. P = MC in the long run, but in the short run to produce that quantity where MC = %3D ATC. O B. MC = ATC in the short run. C. P = MC no matter what the time period, provided that price is greater than average variable cost. D. P = MC no matter what the time period, provided that price is greater than %3D average total cost.
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TABLE 8-1 Revenue and Cost Data for a Perfectly Competitive Firm Daily Output Price Total Revenue TFC TVC TC Profit 0. $30 $0 V $0 $40 -$40 1 $30 $30 $40 $12 W -$22 21 $60 $40 Y $68 -$8 $30 $90 $40 $45 $85 Refer to Table 8-1. What is the value of the variable X? O so $30 $40 $60 3.
4) MULTIPLE CHOICE (identify the one best answer below and explain your reasoning for each option): Readthe question carefully! If a profit-maximising, perfectly competitive firm is producing a quantity at whichprice is higher than average total cost but lower than average variable cost, thena. keep producing both in the short run and in the long runb. keep producing in the short run but exit the market in the long runc. shut down in the short run but return to production in the long rund. shut down in the short run and exit the market in the long rune. Such situation cannot occur.
Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market? Select one: O a. less than $2.50 O b. more than $2.50 Oc. exactly $2.50 Od. The marginal revenue cannot be determined without knowing the actual quantity sold by the typical firm.
Economic profits may result from: O a. innovation b.risk taking Oc. exploiting market inefficiencies Od. all the above O e. a and b
Because perfectly competitive firms are price takers, a permanent increase in the market demand does not change the price of the product in either the short run or long run. O A. True O B. False
Solve it correctly
hould a competitive firm ever produce when it is losing money? Why or why not? D A. No, the firm should shutdown if it is making an accounting loss. O B. No, the firm should shutdown if it is making an economic loss. O C. Yes, as long as revenue can cover total variable costs plus any portion of fixed costs. O D. Yes, as long as revenue can cover some portion of total variable costs.