Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costsare as follows:Output perDayTotal CostVariable CostАТСAVCMC$1.0012.501.502.501.501.53.502.501.751.25134.203.201.401.0670.744.503.501.1250.8750.35.204.201.040.840.76.805.801.330.971.678.707.701.241.11.9810.709.701.341.21If the current equilibrium price in the pencil market is $1, how many pencils will Francesproduce, what price will she charge, and how much profit (or loss) will she make?

Perfect competition is the market form which is characterized by a large number of buyers and…

Answered: If the current equilibrium price in the…

If the current equilibrium price in the pencil market is $1, how many pencils will Frances produce, what price will she charge, and how much profit (or loss) will she make?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider the market for solar power. Assume the market is perfectly competitive and initially in long-run equilibrium; solar power sells for $.25 per kwh (kilowatt hour, a unit of power). Next, to encourage conservation, Congress taxes all forms of energy EXCEPT solar power, causing an increase in the demand for solar Show what happens to the market and the firm in the short run; indicate clearly what happens to price, quantity, and profit.
Suppose that an industry's long-run minimum averagé total cost is $2 per unit of the good. If market demand is as shown in the following graph, what is the long-run equilibrium price and quantity in the market? price $3 $2 $1 $2,1 $2,2 $3,1 $1.3 1 2 3 Demand quantity
The following graph plots daily cost curves for a firm operating in the competitive market for demin overalls. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per overalls) 50 10 10 5 0 MC 2 ATC 8 18 QUANTITY (Thousands of overallises per day) AVC 10 20 Profit or Loss In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm. $ overallses.
Farmer Smith grows apples. The average total cost and marginal cost of growing apples for an individual farmer are illustrated in the graph to the right. Suppose the market for apples is perfectly competitive. If the box, then to maximize profits, farmer Smith should produce apples. (Enter a numeric response using an integer.) market price is $32 per thousand boxes of Price and cost (dollars per box) 40 MC 36- Q AIC Price C 32 28 24 20 16 17 12- &- 4- 0 10 20 30 40 50 60 70 80 Quantity of apples (boxes per month in 1000s) 90 100
Suppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 80 Profit or Loss 70 ATC 60 50 40 20 AVC 20 MC 10 10 12 QUANT TY Thousands of pans per dey 140 45 32 PRICE (Dollars per pan) 品导

Suppose the market price of sugar is 22 cents per pound. If a sugar farmer produces 100,000 pounds, the marginal cost of sugar is 30 cents per pound. Is the farmer maximizing profit? If not, should the farmer produce more or less sugar?
Tomas is the general manager for a local automated car wash. The market he operates is perfectly competitive: Every car wash in the area is charging $7 for a car wash, which is also the marginal cost per wash. What will happen to Tomas’s profits if he changes his price to $8. Why? What about a price of $5? What is his profit-maximizing price?
then, plot the supply curve and equilibrium on the second photo
why does price equal marginal revenue for the perfectly competitive firm? what is the relationship to the demand curve for the firm?
Farmer Jones grows sugar. The total revenue, marginal revenue, total cost, and marginal cost of producing various quantities of sugar (bushels in 1000s) are presented in the table below Marginal Output (bushels in 1000s) Total Revenue Marginal Total Revenue Cost Cost 0 $0 0 1 86 86 120 120 2 172 86 200 80 258 86 240 40 344 86 320 80 5 430 86 480 160 516 86 680 200 Suppose the market for sugar is perfectly competitive. To maximize profits, farmer Jones should produce At that level of output, farmer Jones will earn profit of S thousand bushels of sugar. (Enter a numeric response using an integer)
Tom, a math major, examines Jane's economics class notes and observes that when price-taking firms earn economic profit, they do not seem to produce a quantity that minimizes theircosts. Is he correct?Is there significance to this observation?
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 20 1.00 25 2.00 1.20 30 2.46 1.41 35 3.51 1.71 40 4.11 2.01 45 5.43 2.39 50 5.99 2.75 55 8.47 3.27 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? 2$ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? 2$