Refer to the following information about 3 hypothetical perfectly competitive firms' costs at their profit maximizing outputs. For each firm answer the listed questions. Firm 1 Firm 2 Firm 3 Price = Price $150 Price = $150 $150 ATC= $160 ATC = $160 ATC= $140 AVC = $130 AVC = $155 AVC = $130 1. Will each of these firms earn economic profit, break-even or incur losses? Explain why and show your work. 2. Calculate the per-unit profit or loss if there is any for each firm. Show all your work. 3. Will each of these firms make a decision to continue production at the current output or will make a decision to shut-down. Explain why. Paragraph v в I U 12pt v

Refer to the following information about 3 hypothetical perfectly competitive firms' costs at their profit maximizing outputs. For each firm answer the listed questions. Firm 1 Firm 2 Firm 3 Price = Price $150 Price = $150 $150 ATC= $160 ATC = $160 ATC= $140 AVC = $130 AVC = $155 AVC = $130 1. Will each of these firms earn economic profit, break-even or incur losses? Explain why and show your work. 2. Calculate the per-unit profit or loss if there is any for each firm. Show all your work. 3. Will each of these firms make a decision to continue production at the current output or will make a decision to shut-down. Explain why. Paragraph v в I U 12pt v

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 D= MR AVC AFC 0 Quantity 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5…

A: There are numerous buyers and sellers. None of them has the power to influence the market price(P)…

Q: 3. Use a graph to demonstrate the circumstances that would prevail in a perfectly competitive market…

A: Perfectly competitive market refers to a type of market in which there are a large number of buyers…

Q: a) Using the following graph state the price and quantity the firm will be at if the perfect…

A: Perfect Competition refers to a form of the market In which all firms sell a homogenous product. all…

Q: The graph below shows data for the production of apples for an individual firm operating in a…

A: Perfect competition is a type of market structure in which there are large number of buyers and…

Q: 1. The following table has information on the revenues and costs for Tom's tennis ball manufacturing…

A: Given: It is given that T's tennis ball manufacturing firm is operating under perfect competition…

Q: Question 2 Use the following graph: Costs and Revenue $14 $12 $11.50 $10 0 100 What will firms do in…

A: A competitive market consists of a large number of small firms. No single firm has market power to…

Q: Why is the demand curve facing an individual firm in a perfectly competitive market horizontal? Does…

A: A market with perfect knowledge, many buyers, and a large number of tiny enterprises offering a…

Q: The diagram at the right shows the various short-run cost curves for a perfectly competitive firm.…

A: A perfectly competitive firm is a price taker in the market, meaning it has no control over the…

Q: Heloise and Abelard produce letters in a perfectly competitive industry. Heloise is much better at…

A: Let's tackle each problem:a. True. In a perfectly competitive market, each firm will produce up to…

Q: What two rules does a perfectly competitive firm apply to determine its profit maximizing quantity…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Consider the competitive market for products known as Bergers where there are 500 firms – with each…

A: Perfect competition is a market structure where there is a large number of buyers and sellers exists…

Q: How a firm respond to economy profits and economy losses in perfectly competitive market?

A: In the economic theory, perfect competition happens when all organizations sell indistinguishable…

Q: Refer to Figure 3. Which of the panels represent the situation of a firm in a perfectly competitive…

A: In perfect competition , The demand curve is horizontal. The firms are price taker. They choose…

Q: Discuss the long-term effects in a perfectly competitive market if an existing firm is making…

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Q: The graph to the right represents the situation of Marguerite's Caps, a firm selling caps in the…

A: A perfect market, also known as an atomistic market, is defined by several idealized conditions,…

Q: Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly…

A: Difference between total revenue and total cost gives the economic profit of a firm.

Q: Complete the table and answer the following questions. The price for this perfectly competitive firm…

Q: The table below provides revenue and cost information for a perfectly competitive firm producing…

A: A hypothetical market form in which a large number of small firms compete against each other to sell…

Question

Refer to the following information about 3 hypothetical perfectly competitive firms' costs at
their profit maximizing outputs. For each firm answer the listed questions.
Firm 1
Firm 2
Firm 3
Price =
Price = $150
Price = $150
$150
ATC= $160
ATC = $160
ATC= $140
AVC = $130
AVC = $155
AVC = $130
1. Will each of these firms earn economic profit, break-even or incur losses? Explain why and
show your work.
2. Calculate the per-unit profit or loss if there is any for each firm. Show all your work.
3. Will each of these firms make a decision to continue production at the current output or
will make a decision to shut-down. Explain why.
12pt v
Paragraph v
В I
U A

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Discuss the long-term effects in a perfectly competitive market if an existing firm is making profits and also losses . Use appropriate graphs to illustrate your explanations.
The figure is not finished but how will you draw the long run equilbirum at the price of $100 on this?
Use a graph to demonstrate the scenario where a competitive firm would be earning positive profit in the short run. Can this scenario be maintained in the long run? Why? What are the ‘shutdown point’ and ‘break even point’ of a competitive firm . Explain with diagram. A competitive market starts in a situation of long run equilibrium. Then there is an increase in demand. Explain what happens in the short run and long run, using necessary diagrams.
Please help solve
Consider a firm selling apples and the market for apples is perfectly competitive. The following table presents the costs of a firm. Use the given information to answer questions 35 - 42. Q AFC AVC ATC MC TC 1$300 $100 $400$100$400 2 150 75 225 50 3 100 70 170 60 4 75 72.5 147.5 80 5 60 80 140 11O| 6 50 90 140 140| Find the market price such that the firm's maximized profit = $0 Answer: The firm's maximized profit is $0 if the market price = $.
Question 5 Let's suppose that a perfectly competitive firm has the following revenue and cost data. How many products should the firm produce in order to maximize its profits? You can assume that the firm's price is greater than its average variable cost. Quantity Marginal Revenue Marginal Cost 40 $4 $7.70 41 $4 $5.10 42 $4 $3.30 43 $4 $2.10 44 $4 $2.50 45 $4 $3.70 46 $4 $4.10 47 $4 $5.20 48 $4 $10 Question 6 What is the profit maximizing (or loss minimizing) rule for a firm in perfect competition? Be sure to list all of the conditions.
3