Quantity 10 20 30 40 Fixed Cost 200 200 200 200 Variable Cost 50 100 300 800 Total Cost 250 300 500 1000 Based on the aforementioned chart for a company that is perfectly competitive: A) Calculate the marginal cost using X B) Determine the quantity that will maximize profits if the equilibrium price is $20. C) What kind of profit will the company make? Marginal Cost 0 5 20 X

Quantity 10 20 30 40 Fixed Cost 200 200 200 200 Variable Cost 50 100 300 800 Total Cost 250 300 500 1000 Based on the aforementioned chart for a company that is perfectly competitive: A) Calculate the marginal cost using X B) Determine the quantity that will maximize profits if the equilibrium price is $20. C) What kind of profit will the company make? Marginal Cost 0 5 20 X

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If a perfectly competitive firm's average total cost is less than the price, then the firm A) incurs an economic loss. B) makes an economic profit. C) makes zero economic profit. D) makes either zero economic profit or an economic profit depending on whether the marginal revenue is equal to or greater than the price. E) None of these answers is correct because the relationship between the price and average total cost has nothing to do with the firm's profit.
Which of the following are perfectly competitive markets? Market Tomato Growing Coffee vendor Manufacturing computers Constructing new homes Perfectly Competitive? Yes Yes No Yes Number of Firms Few Many Few Many Type of Product Identical or Differentiated Identical Differentiated Identical Ease of Entry High High Low High
The graph on the right shows cost curves for a perfectly competitive firm. Firm's Supply Curve Use the point drawing tool to identify price-quantity combinations for the prices of $20, $30, $50, and $80 per unit of output. 120- MC 110- Carefully follow the instructions above, and only draw the required objects. 100- AC 90- If there are 100 identical firms in the market, what will be the market supply (to the 80- nearest 100) at these prices? 70- AVC Price Market Supply 2 60- $20 9 50- $30 40- $50 30 20- $80 10- 0- 100 120 140 160 180 Output 20 40 60 80 étv 20 MacBook Air DII 80 F9 F5 F3 F2 #3 $ & 3 4 5 6 9 { E R Y P F G H J K > C V N M command op レレ .... P. AC, AVC, MC B ト
The table below shows the price and cost information for a firm that operates in a perfectly competitive market. Based on this information, what is the profit-maximizing output quantity? Price Quantity Total Cost $8 $8 $8 $8 $8 $8 $8 $6 $10 $15 $21 $28 $35 $45 1 2 3 4 5 6 Profit is maximized at a quantity of type your answer. units, where it is equal to $ type your answer. Is the long run price in this market likely to be higher or lower than the current price of $8? type your answer.
University Economics, Theory of Production
According to the graph below answer the following questions: 1. What is the profit-maximizing quantity 2. What is the total revenue at that quantity 3. What is the total cost at that quantity 4. How much is the total profit at that quantity Perfect Competition with a price of $18. Price $25 $18 $15 70 Quantity 130 MC 160 ATC
The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level maximizing its profit. Consider the level of profits being earned here, and what will happen over time. What will happen in the long run? Note that the horizontal demand curve, D1, is also equivalent to marginal revenue and price. Group of answer choices The market price will increase causing economic profits to increase Demand will increase causing economic profits to increase The market price will decrease until economic profit is zero
a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’s payoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?
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