Perfect Competition Case 1: Table analysis. Using the following table, answer questions that follows: TVC Q TR TC 40 50 26 66 2 100 44 84 3 150 54 94 4 200 72 112 250 98 138 300 132 172 7 350 174 214 224 264 8 1. Is the firm a perfectly competitive one? 2. At what price is the firm selling? 3. If the firm would like to maximize its profit, what quantity should it produce? 400

Perfect Competition Case 1: Table analysis. Using the following table, answer questions that follows: TVC Q TR TC 40 50 26 66 2 100 44 84 3 150 54 94 4 200 72 112 250 98 138 300 132 172 7 350 174 214 224 264 8 1. Is the firm a perfectly competitive one? 2. At what price is the firm selling? 3. If the firm would like to maximize its profit, what quantity should it produce? 400

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. The following figure shows the marginal cost curve and the average total cost curve of a firm operating in a perfectly competitive industry. Price ($) 14 12 10 MR =8 6 4 2 10 20 30 MC ATC Quantity (units) a. What price does the firm face in the market? b. At what level of output does the firm maximize profits? c. What is the revenue of the firm when it sells the profit-maximizing level of output? d. What is the total cost of the firm when it produces the profit-maximizing level of output? e. What is the maximum profit that the firm can make? f. Discuss the implications if the level of production is 10. g. Discuss the implications if the price is 2.
Costs and revenue per case 50% a $14 $12 $22 $16 $13 Question 6 Costs and revenue 22 24 30 30 @ 300 The perfectly competitive price would be: MR 22 24 30 3 ATC Demand Quantly (cases) ATC Demand Quantity In the above graph, the firm would earn: $0 in economic profit and break even $44 economic profit $88 economic profit $22 economic loss $44 economic loss
1) Briefly explain how the total revenue for a profit-seeking film is determined 2)Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? 3)Contrast the rold of fixed costs and variable costs in economic decisions about future prodiction 4)Briefly compare and contrast the perceived demand curve for a monopolitically competitive firm and a perfectly competitive firm. 5)Briefly explain what quantity a profit maximizing monopolistic competitor will seek. Why not this type of competitive frim is productively efficient?
Required information The following figure shows the costs for a perfectly competitive producer: AVC, ATC, MC $46 235 30 25 20 15 10 5 0 MC 10 20 30 40 50 60 70 80 90 100 ATC AVC Output per period Refer to the above figure to answer this question. If the price of the product is $10, what is the profit-maximizing (or loss-minimizing) output?
Complete the table and answer the following questions. The price for this perfectly competitive firm is $150. QTY FC VC TC AFC AVC ATC MC MR 0 500 1 650 2 700 3 760 4 840 5 950 6 1090 7 1270 8 1500 9 1790 10 2150 What price will this firm charge for its product? Should this firm produce? If so, how many units should it produce? If not, should it shut down? What is the economic profit or economic loss?
please answer within 30 minutes in details.
a.What is the profit maximizing level of output for the firm? b.What is the economic profit earned or loss incurred by the firm? c. Based on your answers of (a) & (b) determine what should be the firms decision regarding exit in the long run. Explain your answer.
Problem two Consider the total cost and total revenue given in the following table: Total Total Quantity cost Revenue 0 1 2 3 4 5 6 7 8 9 10 11 13 19 27 37 0 8 16 24 32 40 48 56 a) Calculate the profit for each quantity. How much should the firm produce to maximize profit? b) Calculate the marginal revenue and marginal cost for each quantity. Graph them. c) Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?
(Figure 10-3)What is the maximum economic profit this firm depicted in Figure 10-3 will be able to earn? Group of answer choices $600 $200 $400 $0
Question 5: Perfect Competition Use the cost schedule below to answer the following questions about a price-taking firm who produces discrete units (there cannot be a half-computer in this world). ATC is average total cost, AVC is average variable cost and AFC is average fixed cost. Computers per Day Fixed Cost Variable Cost Total Cost Marginal Cost АТС AVC AFC Price $30 $0 $35 1 $30 $20 $30 $30 3 $30 $40 4 $30 $60 $30 $90 6. $30 $130 7 $30 $180 8 $30 $240 $30 $310 10 $30 $390 1. Fill out the schedule above. 2. Given the price information you've received, how many computers/day will the firm produce? What will be the economic profit (or loss) this firm receives? 3. If the firm is making a positive profit, do you expect it to persist in the long run? Why?
The table shows total cost and total revenue information for a competitive firm. Quantity (units) Total cost ($) Total revenue ($) 0 500 0 1 600 135 2 710 270 3 830 405 4 960 540 5 1,100 675 6 1,250 810 7 1,410 945 8 1,580 1,080 9 1,760 1,215 10 1,950 1,350 Firms making a loss will compare the losses if it shuts down to the losses if it operates in the short run. What quantity will the firm produce if it shuts down in the short run? Output: unitsunits What will the profits be if this firm shuts down? $ What quantity will the firm produce to minimize losses in the short run? unitsunits If this firm chooses to operate at a loss, what will its profits equal? $ If the cost and revenue numbers in the table will continue permanently, what will this firm choose to do? The firm will continue to operate in the short run, and exit the market in the long run. shut down…