Given the information presented in the following graph, which of the followingis an accurate statement?PricePo0ATCAVCm20MCDDQuantityBecause this is a perfectly competitive firm, the profit maximizing rule is not P =MC,Profits will be reduced by expanding production to the zone where MC exceedsMR.Because this is a perfectly competitive firm, the profit maximizing rule is not P =MR.Production should keep expanding because MR is always less than MC.

In a perfectly competitive market, there are numerous buyers and sellers, each producing or…

Given the information presented in the following graph, which of the following is an accurate statement? Price Po 0 ATC AVC m Q MC DD Quantity Because this is a perfectly competitive firm, the profit maximizing rule is not P = MC. O Profits will be reduced by expanding production to the zone where MC exceeds MR. Because this is a perfectly competitive firm, the profit maximizing rule is not P = MR. Production should keep expanding because MR is always less than MC.

Given the information presented in the following graph, which of the following is an accurate statement? Price Po 0 ATC AVC m Q MC DD Quantity Because this is a perfectly competitive firm, the profit maximizing rule is not P = MC. O Profits will be reduced by expanding production to the zone where MC exceeds MR. Because this is a perfectly competitive firm, the profit maximizing rule is not P = MR. Production should keep expanding because MR is always less than MC.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What will happen when variable costs rise in a perfectly competitive industry? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b C Question 5 d The number of firms will eventually increase, but the existing firms will cut back production in the short run. The number of firms will eventually decrease and the existing firms will cut back production in the short run. The number of firms will eventually decrease, but the existing firms will expand production in the short run. The number of firms will eventually increase and the existing firms will expand production in the short run. B
If the price was given what is the formula equation to figure the "profit-maximizing quantity of output" for a perfectly competitive firm?
Question 18 Suppose a perfectly competitive firm faces the following situation: P = $10, output= 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? = O The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. The firm earns a profit but should decrease output to maximize its profits.
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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? e. Consider a different market structure, where there is only one firm, interpreted as a monopolist, and then critically discuss the impact on equilibrium price and quantity. Discuss total surplus for these two types of market structures.