PriceP₁P2PsPAMCATCAVCIf the short-run price isA) P1; break evenQuantity, the perfectly competitive firm willB) P2; earn negative economic profitC) P3; earn positive economic profitD) P1; earn positive economic profitE) p4; break even

The objective of the question is to understand the relationship between the short-run price and the…

Answered: Price P₁ P2 Ps PA MC ATC AVC If the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

A perfectly competitive firm can A) sell all of its output at the prevailing market price. B) set a higher price to customers who are willing to pay more. C) raise its price in order to increase its total revenue. D) sell additional output only by lowering its price. E) usually not sell all the output it produces, but still "over-produces" because there are some periods when it can sell the extra output at very profitable prices.
MC АТС $25.00 AVC $19.50 -- $15.00 $12.50 - - 30 40 50 60 Output (Q) For the firm shown in the diagram above, its Long Run Supply Curve is its curve for any price greater than ATC; $19.50 MC; $12.50 AVC; $12.50 MC; $19.50
Which of the following is not a characteristic of a perfectly competitive market? a) Many buyers and sellers b) Homogeneous products c) Barriers to entry d) Perfect information
39) If a perfectly competitive firm operates in the short run but exits the industry in the long run, then the firm's short run condition isA) TR > TVC and TR < TC. B) TR > TC.C) TR < TVC. D) TR < TFC.
any letter; cannot be E
Consider the perfectly competitive market for sports jackets. The following graph shows the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves for a typical firm in the industry.
Answer multiple choice
Marginal revenue is A) the change in total revenue from a one-unit increase in the quantity sold. B) less than price for a perfectly competitive firm. C) another name for total revenue. D) the economic profit from producing an additional unit of output. E) the change in total cost from producing an additional unit of output.
The supply curve for a competitive firm is: a)it’s entire MC curve b)the upward-sloping portion of its MC curve c)it’s MC curve above the minimum point of the AVC curve d)it’s MC curve above the minimum point of the ATC curve e)it’s MR curve
A firm operates in a perfectly competitive market. The firm’s total cost of production is given by the following equation: TC(q) = 100 + 48q2 + 5q, where q is the quantity supplied. What is the shutdown point for this firm in the short run, or in other words, what is the market price below which a firm is better off not supplying any units in the short run? [Advice: draw AVC and MC]
In a perfectly competitive market, economic profit can be positive in the long run. MR = MC because of the entry/exit adjustment process in the long-run. In the long-run, firms shut down if the market price is lower than average total cost. in the short-run, firms can stay in business when they earn negative profit.
Use the values for a perfectly competitive firm below to answer the questions: Price Quantity Total Cost Fixed Cost Variable Cost $10 2,000 $24,000 $8,000 $16,000 (A) Should this firm shut down in the short run? (B) Assume this firm's total costs do not change in the long run. Should this firm exit in the long run? (C) Are your answers to (a) and (b) different? Explain in one to four sentences.

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Price P₁ P2 Ps PA MC ATC AVC If the short-run price is A) P1; break even Quantity , the perfectly competitive firm will B) P2; earn negative economic profit C) P3; earn positive economic profit D) P1; earn positive economic profit E) p4; break even