Question 4An industry currently has 100 firms, each of which has fixed costs of $16 and average variableC+ts as follows:Quantity Average Variable CostAverage Total CostMarginal Cost1$12.2.346a. Compute a fim's marginal cost and average total cost for each quantity from 1 to 6.b. The equilibrium price is currently $10. How much does each firm produce? What is the totalquantity supplied in the market?c. In the long run, firms can enter and exit the market, and all entrants have the same costs as above.As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will thequantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? Explain youranswers.P312:31 PM12/22/202012 IAslelete*5%numhomeG H4J JO ULBMendalt grpgupctrlhomepgdnendinsertASUS Laptop一

Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Question 4 An industry currently has 100 firms, each of which has fixed costs of $16 and average variable Cts as follows: Quantity Average Variable Cost Average Total Cost Marginal Cost 1 $1 2. 2 3 4 5 6. a. Compute a firm's marginal cost and average total cost for each quantity from 1 to 6. b. The equilibrium price is currently $10. How much does each firm produce? What is the total quantity supplied in the market?

Question 4 An industry currently has 100 firms, each of which has fixed costs of $16 and average variable Cts as follows: Quantity Average Variable Cost Average Total Cost Marginal Cost 1 $1 2. 2 3 4 5 6. a. Compute a firm's marginal cost and average total cost for each quantity from 1 to 6. b. The equilibrium price is currently $10. How much does each firm produce? What is the total quantity supplied in the market?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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
Figure: Cost Curves for Corn Producers Reference: Ref 12-3 (Figure: Cost Curves for Corn Producers) Look at the figure Cost Curves for Corn Producers. The market for corn is perfectly competitive. If the price of a bushel of corn is $10, in the short run, the farmer will produce _____ of corn and earn an economic _____ equal to _____. 3 bushels; profit; loss, -$15 2 bushels; profit; $0 4 bushels; profit; just less than $80 per bushel 2 bushels; loss; just more than $80 per bushel
5. Profit maximization and shutting down in the short run Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (? 40 36 32 28 24 20 ATC 16 12 AVC MC 4 2 4 6 8 10 12 14 16 18 QUANTITY (Thousands of wind chimes) PRICE (Dollars per wind chime) 20
BEHIND THE SUPPLY CURVE: INPUTS AND COSTS The accompanying table shows a boat manufacturer’s total cost of producing boats.Quantity of Boats Total Cost 0 $450,000 1 $490,000 2 $510,000 3 $520,000 4 $540,000 5 $570,00 6 $610,000 7 $670,000 8 $750,000 9 $870,000 a.What is this manufacturer’s fixed cost?b.For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC)Qty of boats Total Cost Variable Costs Average Variable Costs Average Total Costs Average Fixed Costs 0 $450,000 - - - -
(J) Canadian red wheat is a normal good, in a perfectly competitive market which is in long run equilibrium. There occurs a boon in the economy and income rises. What effect does this have on short run equilibrium price and equilibrium quantity? Draw a short run industry graph showing the change described above. Remember to label every curve, label your axes, and demonstrate the resulting changes in the axes.
Use the following data to analyze the condition when the product price is set at $56. A. How much would be the total revenue? B. What will be the profit-maximizing or loss-minimizing output? C. How much would be the total cost?
Basti’s Coffee operates in a competitive market. The short run price in the coffee market is equal to Basti’s Coffee average variable cost. a. Using two correctly labeled graphs show the coffee market side by side with Basti’s Coffee. Clearly indicate which graph represents the market and which represents Basti’s Coffee. In your graph identify: i. price and quantity in the coffee market (3) ii. price and quantity for Basti’s Coffee (3) iii. The area of economic profit or loss for Basti’s Coffee (3)
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)
revenue MC AC 10 AR=MR=DD AVC 8 5 3 Quantity 20 25 Answer the questions based on Figure 2 above. (d) What is the market structure faced by this firm? (e) What is the equilibrium price and quantity? (f) Does the firm make a profit or a loss? What is the value? (g) Assume that the economic downturn causes a decline in the price of goods. What are the conditions of closing the factory where the firm will stop production? (h) What is the price level at the factory closing point?
What will happen to the demand curve for this toilet company in the long run? Describe two things that will happen to the demand curve. How much is the long run equilibrium quantity and price?
9 Healthy Harry's Juice Bar has the following cost schedules: yC AY Q (vats) Variable Cost Total Cost $ 30 10 40 55 25 75 3 45 100 70 4 130 100 165 135 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is the relation- ship between the marginal-cost curve and the average-total-cost curve? Between the marginal-cost curve and the average-variable- cost curve? Explain.
The figure below shows the supply and the demand for a good (left) and the cost curves of an individual firm in this market (right). Assume that all firms in this market, including the potential entrants, have identical cost curves. Initially, the market is in equilibrium at point A. Price 6 Cost 17 D 8 10 12 Quantity ATC O the price is $1.00 and the quantity sold is 6 units O the price is $3.00 and the quantity sold is 2 units O the price is $2.00 and the quantity sold is 2 units O the price is $2.00 and the quantity sold is 4 units Quantity Refer to the figure above. Suppose that the market has reached the long-run equilibrium. Then, due to news of the product's defects and recall, the demand falls by 2 units at each price. The market will tend toward the new long run equilibrium where