QUESTION 2: Consider the cost curves for a perfectly competitive fim. $9.00 $8.00 $7.00 $6.00 ATC $5.00 $4.00 AVC $3.00 $2.00 $1.00 $0.00 100 200 300 400 500 600 380 480 Quantity A) Refer to the graph above. If market price of product is $7, the firm produces maximize profits. units to a. 380 c. 600 d. 480 b. 500 B) Refer to your answer above. At the profit maximizing output level, the fim makes a total profit (loss) of $ and the firm can expect in the long-run: a. $500; entry b. $480; entry c.$ 800; entry d. $0; no entry no exit Price, Cost

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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QUESTION 2:
Consider the cost curves for a perfectly competitive firm.
MC
$9.00
$8.00
$7.00
$6.00
ATC
$5.00
$4.00
AVC
$3.00
$2.00
$1.00
$0.00
100
200
300
400
380
480
500
600
Quantity
A) Refer to the graph above. If market price of product is $7, the fim produces
maximize profits.
units to
a. 380
b. 500
с. 600
d. 480
B) Refer to your answer above. At the profit maximizing output level, the firm makes a total profit
(loss) of $
in the long-run:
and the firm can expect
a. $500; entry
b. $480; entry
c.$ 800; entry
d. $0; no entry no exit
Price, Cost
Transcribed Image Text:QUESTION 2: Consider the cost curves for a perfectly competitive firm. MC $9.00 $8.00 $7.00 $6.00 ATC $5.00 $4.00 AVC $3.00 $2.00 $1.00 $0.00 100 200 300 400 380 480 500 600 Quantity A) Refer to the graph above. If market price of product is $7, the fim produces maximize profits. units to a. 380 b. 500 с. 600 d. 480 B) Refer to your answer above. At the profit maximizing output level, the firm makes a total profit (loss) of $ in the long-run: and the firm can expect a. $500; entry b. $480; entry c.$ 800; entry d. $0; no entry no exit Price, Cost
C) Refer to the graph above. The firm should shut down if the price falls below
accept the total loss of
and
a. $3.00; -$800
b. $5.00; $760
c. $7.00; $500
d. $2.00; $500
| D) The firm's supply curve is:
a. The portion of ATC curve above price of $5 c. The portion of MC curve above $3
b. The AVC curve above $4
d. The marginal cost curve above $5
EIn the long-run equilibrium, the fim will charge the price of_
output and ean
- produce
units of
economic profit.
a. $3.00; 200; $600 in profit
c. $7:00; 500; -$1,000o loss
b. $5; 380; normal profit
d. $9, 600; positive economic profit of $600
F) Refer to the graph above. How often, does the firm in the graph above engage in price
discrimination? Why?
A) Rarely
B) Very often
C) Always
D) Never
Transcribed Image Text:C) Refer to the graph above. The firm should shut down if the price falls below accept the total loss of and a. $3.00; -$800 b. $5.00; $760 c. $7.00; $500 d. $2.00; $500 | D) The firm's supply curve is: a. The portion of ATC curve above price of $5 c. The portion of MC curve above $3 b. The AVC curve above $4 d. The marginal cost curve above $5 EIn the long-run equilibrium, the fim will charge the price of_ output and ean - produce units of economic profit. a. $3.00; 200; $600 in profit c. $7:00; 500; -$1,000o loss b. $5; 380; normal profit d. $9, 600; positive economic profit of $600 F) Refer to the graph above. How often, does the firm in the graph above engage in price discrimination? Why? A) Rarely B) Very often C) Always D) Never
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