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the demand curve for a competitive firm is
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- What are the four conditions of a purely competitive market?Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 50 45 Profit or Loss 40 35 30 ATC 25 20 AVC 10 MC 0. 4. 10 12 14 16 18 QUANTITY (Thousands of shirts) In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. 20 15 PRICE (Dollars per shirt)The following graph shows the demand curve, as well as the AVC, ATC and MC curves of a company selling rolled oats in a perfectly competitive market. Use the graph to answer the questions. The goal of the company is to maximize its profit. How many boxes of rolled oats should it sell to attain this goal? What price will it charge? How much profit does this firm make per month? Will this company produce or shut down in the short run? Why? Will this firm exit the market for rolled oats in the long run or not? Why?
- The supply curve for a competitive firm is: a)it’s entire MC curve b)the upward-sloping portion of its MC curve c)it’s MC curve above the minimum point of the AVC curve d)it’s MC curve above the minimum point of the ATC curve e)it’s MR curveSleek Sneakers Co. is one of many firms in the market for shoes. Show the effect that positive profits has on the demand curve faced by Sleek in the long run. Price Quantity Demand 中 Demand ?A perfectly competitive firm is currently maximizing profits. The market for its product is in a long-run equilibrium. Market demand for the product decreases. Briefly explain what happens in the market by describing what will happen to this firm’s production (and most importantly why) as a result of that change. Describe what will happen and why to the firm’s costs and profits as the firm makes its choices. Emphasize why each type of individual cost does or does not change as the firm changes its level of production.
- The accompanying graphs represent the soy bean market, a competitive market and Roy's Soys, an individual firm in the market for soy beans. The soy bean market graph depicts the short-run supply (SRS), long-run supply (LRS), and demand (D). The graph for Roy's Soys represents marginal consts (MC) and average costgs (AC). The market and the firm are currently in long-run equilibrium at point A. a. Demonstrate what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight-loss supplement. On the market graph, you will shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. b. Now, demonstrate the changes that get both graphs back to long run equilibrium. Use shift(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the green points labeled C. Soy Bean Market Roy's Soys 20 20 Price…Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 150 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the CDC's announcement. 10 9. Supply Demand 7 Supply 4 3 Demand 2 1 30 60 90 120 150 180 210 240 270 300 QUANTITY (Millions of cans) PRICE (Dollars per can)What is output per firm at the long-run equilibrium price? What is the long-run equilibrium profit?
- Please graph what the market looks like with a short decrease in demand and what one firm looks like with a short run decrease in demand. Please make sure to graph your answer with all necessary labeling.In the above figure, if the price is $16 per unit, how many units will a profit maximizing perfectly competitive firm produce?Suppose that the market for air fresheners is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 40 36 Profit or Loss 32 28 ATC AVC MC 4 2 4 6 10 12 14 16 18 20 QUANTITY (Thousands of air fresheners per day) In the short run, at a market price of $20 per air freshener, this firm will choose to produce v air fresheners per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's v would be $ thousand per day in the short run. PRICE (Dollars per air freshener)
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