On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected.**Note:** In the following question, you should enter a positive number in the numeric entry field.The area of this rectangle indicates that the firm’s [dropdown] would be $[numeric entry] per day. **Title:** Understanding Cost Curves in a Perfectly Competitive Market**Description:**In a perfectly competitive market for dress shirts, the following graph displays the daily cost curves of a firm operating in this environment. **Graph Explanation:**- **Axes:** - The vertical axis represents the price in dollars per shirt. - The horizontal axis shows the quantity in thousands of shirts.- **Curves:** - **MC (Marginal Cost):** This curve has a U-shape, indicating that initially, the cost decreases with the increase in quantity, followed by an increase. - **AVC (Average Variable Cost):** Another U-shaped curve, demonstrating how variable costs per unit change initially decrease and then increase as production scales. - **ATC (Average Total Cost):** Also U-shaped, representing the overall per-unit cost including both fixed and variable costs.- **Profit or Loss Guideline:** Illustrated on the right, indicating assessments of profit or loss by comparing prices and costs.**Scenario:**In the short run, if the market price is $15 per shirt, the firm must determine the optimal level of production based on these cost curves. **Conclusion:**At a market price of $15 per shirt, this firm will choose to produce __________ shirts per day.Analysis of this graph allows students to understand how a firm in a perfectly competitive market decides on the quantity of output that maximizes profit or minimizes loss, based on the intersection of price and cost curves.

Perfectly competitive market is a type of market in which homogeneous goods, that are perfectly…

Answered: Suppose that the market for dress…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for demin overalls. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per overalls): 50 45 40 35 25 20 15 10 5 0 0 2 MC ATC 6 AVC 4 8 10 12 14 16 QUANTITY (Thousands of overallses per day) 18 20 Profit or Loss
At a market price of $5 your artisanal pencil business maximizes profits by producing 484 pencils per day. When you produce this quantity of pencils per day, your average cost per unit is $4. What is your total revenue per day? $ What is your total cost per day? $ What is your daily profit? $
Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. V AVC COSTS (Dollars per ton) 100 882 889 80 20 0 MC 5 25 30 35 QUANTITY (Thousands of tons) 15 20 10 45 40 50 The following diagram shows the market demand for steel.
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
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The table shows cost data for a firm that is selling in a perfectly competitive market. This firm's minimum average variable cost is $14 and has fixed costs equal to $100. Output 5 7 9 11 11 units 9 units Refer to the above cost table. If the price of the product is $26, the firm will produce Select TWO answers from the choices below; one selection is the number of units produced and the second selection is the dollar amount of the loss earned by the firm. ✔$100 $30 $28 $0 7 units 00 units 5 units ATC $34.00 30.00 30.55 33.09 $182 MC $13 26 35 48 for a loss.
The table shows cost data for a firm that is selling in a perfectly competitive market. This firm's minimum average variable cost is $14 and has fixed costs equal to $100. Output 5 7 9 11 $30 Refer to the above cost table. If the price of the product is $26, the firm will produce loss. 7 units 9 units Select TWO answers from the choices below, one selection is the number of units produced and the second selection is the dollar amount of the loss earned by the firm. $28 $100 $0 $182 11 units ATC $34.00 30.00 30.55 33.09 O units MC $13 5 units 26 35 48 for a
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 20 1.00 25 2.00 1.20 30 2.46 1.41 35 3.51 1.71 40 4.11 2.01 45 5.43 2.39 50 5.99 2.75 55 8.47 3.27 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? 2$ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? 2$
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
20) - Google Chrome "mod/quiz/attempt.php?attempt%3=1579003&cmid%3812962&page%3D2 em (Academic 20- MC ATC AVC 16 4. 5 10 15 20 25 30 35 40 45 50 Quantity (units per day) The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have th same cost curves and the price equals $16 per unit Select one: O a. over time, the price will fall as new firms enter the market. O b. over time, firms will leave this market. O c. the market is in its long-run equilibrium. O d. the firm is making zero economic profit. o search hp Price and cost (dollars per unit)
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 25 2.20 30 2.02 2.17 35 2.45 2.21 40 3.57 2.38 45 4.00 2.56 50 5.46 2.85 55 5.93 3.13 60 8.53 3.58 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds?
9. Problems and Applications Q9 The market for apple pies in the city of Ectenia is competitive and has the following demand schedule: Each producer in the market has a fixed cost of $6 and the following marginal cost: Quantity Marginal Cost (Dollars) 1 1 2 3 4 5 6 Complete the following table by computing the total cost and average total cost for each quantity produced. Quantity Total Cost Average Total Cost (Ples) (Dollars) (Dollars) 1 2 3 4 3 8 10 12 14 The price of a pie is now $11. At a price of $11, making a profit of O True O Fal pies are sold in the market. Each producer makes True or False: The market is in long-run equilibrium. Suppose that in the long run there is free entry and exit. In the long run, each producer earns a profit of each producer makes pies, so there are The market price is producers operating. pies, so there are At this price, producers in this market, each pies are sold in this market, and

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