Quantity Total Cost 32 4 5 6 7 260 300 380 480 600 Average Marginal Total Cost Cost 86.67 75.00 76.00 80.00 85.71 20 Fall because firms will supply less goods Fall because firms will supply more goods Rise because firms will supply more goods Rise because firms will supply less goods 40 80 100 120 Suppose that in a competitive market the market price is $100. As this market makes the transition to its long-run equilibrium, prices will...

Quantity Total Cost 32 4 5 6 7 260 300 380 480 600 Average Marginal Total Cost Cost 86.67 75.00 76.00 80.00 85.71 20 Fall because firms will supply less goods Fall because firms will supply more goods Rise because firms will supply more goods Rise because firms will supply less goods 40 80 100 120 Suppose that in a competitive market the market price is $100. As this market makes the transition to its long-run equilibrium, prices will...

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 2 Assume that the market for cage-free eggs is perfectly competitive. All else equal, as farmers find it less profitable to produce and sell cage-free eggs in this market the supply curve will shift to the right, the demand curve will shift to the left, and the equilibrium price will decrease. the supply curve will shift to the left and the equilibrium price will increase. the demand curve will shift to the left and the equilibrium price will decrease. the supply curve will shift to the left, the demand curve will shift to the left, and the equilibrium price will increase.
Consider a perfectly competitive market. Currently the equilibrium price is above the minimum of Average Total Cost. This is likely to result in _____________ and ___________ in price. A. Decrease in market demand; decrease in price B. Increase in market demand; increase in price C. Increase in market supply; and decrease D. Decrease in market supply; and decrease E. Increase in market supply; and increase F. Decrease in market supply; and increase
5. Short-run equilibrium Consider a perfectly competitive market for wheat in Chicago. There are 120 firms in the industry, each of which has the cost curves shown on the following graph: (? 100 90 MC 80 70 60 ATC 50 40 30 AVC 20 10 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) COST (Cents per bushel)
8. Short-run and long-run effects of a shift in demand Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 100 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by producing the same amount of tempeh and running at a loss Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video. PRICE (Dollars per pound) 10 9 8 1 0 0 20 Supply 40 60 80 100 120 140 QUANTITY (Millions of pounds) In the long run, some firms will respond by D. D₂ 160 180 200 consumer demand returns to its original level Demand Supply (?) exiting the industry until and unhealthy skin. The viral video is expected to cause…
Place the orange line (square symbol) on the graph to show the most likely long-run supply curve for pears. (Note: Place the points of the line ei an W and R or on W and M.) PRICE (Dollars per pound) 48 40 2 Z L 0 W 04 6 4 Short-Run Supply 2 8 10 QUANTITY (Thousands of pounds of pears) 12 0 Long-Run Supply
Am. 104.
At the current short-run market price, firms will __________ in the short run. In the long run, ____________ the market given the current market price.
Question 14: When the work artists put into their craft exceeds any reasonable expectation of profit or even a break-even return creates a _____. A Demand market B Supply market C Irrational market D Equilibrium market
Assume that the cost data in the following table are for a purely competitive producer: Average Average Average Total Variable Marginal Cost Total Fixed Product Cost Cost Cost 1 $60.00 $45.00 $105.00 $ 45.00 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 12.00 37.00 49.00 35.00 6. 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 7.50 40.63 48.13 55.00 9. 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $57.00 (i) Will this firm produce in the short run? (Click to select) V (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? |(Click to select V output = units per firm (iii) What economic profit or loss will the firm realize per unit of output? |(Click to select v per unit = $ b.…
Use the graph below to answer the questions. Price $7 $6 $4 $2.50 Loss MC ATC MR₁ MR₂ 100 125 140 Firm's quantity (q) Suppose a firm in a competitive market faces a market price of $6. If the firm produces a level of output to maximize profit, how much profit does the firm earn? ✪ $ 840 If the market price drops to $4, the firm starts losing money. How much money does it lose? $ 280
Economics
If there were 10 firms in this market, the short-run equilibrium price of steel would be $______per ton. At that price, firms in this industry would ______(shut down/operate at a loss/ earn a positive profit/ earn zero profit). Therefore, in the long run, firms would__________(enter/ exit/ neither enter nor exit) the steel market. Because you know that competitive firms earn______(zero/ negative/ positive) economic profit in the long run, you know the long-run equilibrium price must be $_____per ton. From the graph, you can see that this means there will be_____(10/20/30) firms operating in the steel industry in long-run equilibrium.