In a perfectly competitive market, each firm has a long-run total cost given by LTC = 100Q - 10Q² + 1/2Q³. What is the market's long-run equilibrium price? 00 O 50 25 150 4
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- Assume the price of a product sold by a purely competitive firm is $5. Given the data in the accompanying table, at what output level is total profit highest in the short run? Output Total Cost 20 $70 25 75 30 85 35 100 40 125 45 155 50 190 O 20 O 50 O 30 O 40Consider a perfectly competitive market with identical firms. Each firm faces following average variable cost (AVC) function: 1 AVC(Q) = (Q-40)2 + 25 40 If each firm's marginal revenue is equal to its marginal cost when (Q,P) = (40,20), what should happen to long-run prices? O A. Rise B. Stay the same C. Fall This happens because firms A. are earning positive short-run profit B. are breaking even O C. are earning short-run economic loss O O OWhich of the following is always true for the profit-maximizing firm in a perfectly competitive output market (as discussed in Chapter 8): O a. The economic profit at the profit maximizing output is negative. O b. The profit maximizing output is equal to the price given by the market. Oc. The economic profit at the profit maximizing output is positive. O d. At profit maximizing output, the slope of the total cost curve is equal to the slope of the total revenue curve. Say you have following Engle curve (which are the dashed lines) relating household income and pollution: FIGURE 1.-POLLUTION EMBODIED IN HOUSEHOLD CONSUMPTION: PM10 O 1984 2012 10 15 Average After-Tax Income (10,000 2002 $) Which of the following statements about this Engle curve is true in 2012? Select one: O a. Household pollution is a Giffen good. O b. Household pollution is a normal good. O c. Househald pollution is an inferior good. O d. Household pollution starts as an inferior good, and then becomes a normal good.…
- Suppose the costs of a perfectly competitive firm are given by TC = 30 +3Q+0.5Q2 and MC= 3+Q. The supply equation of the firm is, therefore, Q = -3 + P. If the market price is $13, what is the total profit of the firm? O $20 $130 -$110 O $10The table below describes a firm that sells output in a perfectly competitive market. Note the second column describes total costs. O $8 O $12 O $6 Output O $4 0 1 2 3 4 5 Which of the following market prices would cause the firm's profit-maximizing output level to be equal to 5? 6 Total Cost (in dollars) $3 $9 $14 $18 $23 $30 $40 4Price (dollars) 8 7 6 5 4 3 2 1 0 80 O increase; increase; increase O remain same; remain same; decrease O decrease; remain same; decrease O decrease; decrease; decrease Short-run Short-run MC AC 100 110 The graph above shows the cost curves for a firm selling in a perfectly competitive market. If the market demand falls due to a recession, the long run equilibrium price will output will ., the firm's and industry output will Output (per day) Long-run AC
- Suppose we have a firm in a perfectly competitive market. Assume that we have the usual shaped cost curves. At a market price of $15 the profit maximizing firm produces 53 units. Something changes that causes the firm to produce a quantity of zero at a price of $15 in the short-run. Which of the changes below can explain the change in the firm's behavior? O An increase in the fixed cost and a decrease in the marginal cost. O An increase in the fixed cost. O An increase in the marginal cost. O A decrease in the market price.Please helpSandra has a short-run cost function of producing good 1 of c(q) = 4q² + 40, where q is the quantity of good 1 produced. If she received a price of $24 for each unit of good 1 sold, what is Sandra's profit-maximising level of profit assuming that the market is perfectly competitive? O $42 O $12 O -$8
- After serving as President of the United States for eight years, Dena has retired from politics and has decided to become a wheat farmer. The market for wheat is perfectly competitive and the current market price for wheat is $10 per bushel. Dena is currently producing 8 bushels (Dena can only produce this good in whole units). Her total cost at 8 units of output is $88 and her variable cost at 8 units of output is $64. Dena knows that if she produces a 9th unit her total cost will become $97, and if she produces a 10th unit her total cost will become $110. Dena’s goal is to maximize her profits. Based on this information, identify whether each of the following would be true or false and briefly explain your reasoning. Dena is currently losing money in the short-run and she would be better off if she shutdown and produced zero. Dena is not currently profit maximizing at 8 units of output and she could increase her profits if she expanded output by one unit. Dena would increase her…Figure shows the cost structure of a firm in a perfectly competitive market. at the market price $30, the break-even output is: Р. $30-- $25 $13 $5 O a. 1,000 O b. 450 O c. 30 O d. 800 450 MC 800 1,000 AT AVSuppose a firm has a fixed cost of F > 0 and a constant marginal cost of c> 0. What can we infer about the short run and long run supply curves? Both the short run and long run supply curves will be downward sloping. Both the short run and long run supply curves will be upward sloping. The short run supply curve will be upward sloping, but the long run supply curve will be downward sloping. O The short run and long run supply curves will be identical. O None of the above.