Macmillan Learr2100102030 40 50 60Quantity (in thousands)The demand shift results inDemand1Demand270 80 90 100a short-run economic loss for the firm.a long-run economic profit for the firm.O a short-run economic proft of 0.O a short-run economic profit for the firm.Long-run equilibrium is restored in this industry when210010MC203040 50 60Quantity7080O short-run economic losses cause resources to flow to other industries. In the long run, firms exit the industry,reducing market price and driving economic profit to 0. Long-run equilibrium is restored whenP = LRAC = SRATC = MC.90short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price anddriving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC.short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price anddriving economic profit to 0. Long-run equilibrium is restored when P > LRAC = SRATC = MC.O short-run economic losses attract resources. In the long run, firms enter the industry, increasing market price anddriving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC.100 Macmillan LearningConsider the graphs of a constant cost industry and a perfectly competitive firm within it. Initially, the industry is in long-runequilibrium at point E, then demand shifts from Demand1 to Demand2. Answer the questions where P is the price, MR is themarginal revenue, AR is the average revenue, MC is the marginal cost, SRATC is the short-run average total cost, and LRACis the long-run average total cost.Manipulate both of the graphs to reflect the adjustments that yield the long-run equilibrium.Price ($)1098765432100 10209876XX53MC21E6030 40 50Quantity (in thousands)The demand shift results in70Supplya short-run economic loss for the firm.Demand1 Demand21080 90 100001020SRATC3040 50 60Quantity7080LRACP=MR=A90 100

Long-run equilibrium is a state in which an industry or market has reached a stable equilibrium…

The demand shift results in a short-run economic loss for the firm. O a long-run economic profit for the firm. a short-run economic proft of 0. O a short-run economic profit for the firm. Long-run equilibrium is restored in this industry when short-run economic losses cause resources to flow to other industries. In the long run, firms exit the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC. short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC. short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P > LRAC = SRATC = MC. short-run economic losses attract resources. In the long run, firms enter the industry, increasing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC.

The demand shift results in a short-run economic loss for the firm. O a long-run economic profit for the firm. a short-run economic proft of 0. O a short-run economic profit for the firm. Long-run equilibrium is restored in this industry when short-run economic losses cause resources to flow to other industries. In the long run, firms exit the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC. short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC. short-run economic profits attract resources. In the long run, firms enter the industry, reducing market price and driving economic profit to 0. Long-run equilibrium is restored when P > LRAC = SRATC = MC. short-run economic losses attract resources. In the long run, firms enter the industry, increasing market price and driving economic profit to 0. Long-run equilibrium is restored when P = LRAC = SRATC = MC.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please no written by hand solutions 9. A firm produces a product in a perfectly competitive industry and has a short-run total cost function of SRTC= 50+ 4q+2q. In the short-run, the market equilibrium price is $20 and the firm's profit maximizing quantity is_ Assuming there is no change in cost structure, in the long-run the equilibrium price changes to a. 4; $24 b. 4:$15 c. 5; $24 d. 5:$15 10. The market for sugar consists of 3,500 identical firms, each with the following short-run total cost function: SRTC-1,500+ 35q. The market demand curve for sugar is Q=11,200- 30P. What is each firm's short-run profit? a. So b. $280 c. -$1,080 d. -$1,360 e. -$1,500
What will happen in a perfectly competitive industry in response to firms earning a positive economic profit? * Firms will exit the industry. O The short-run industry supply curve will shift right. O The short-run industry supply curve will shift left. Firm output will increase. Market price will increase.
Which describes the firms supply curve for the short run with perfect competition? O The section of MC that is above AVC O The section of MC that is above ATC There is no supply curve since it depends on the slope of demand O The section of ATC to the right of its intersection with MC Which describes the long run equilibrium situation for a firm in perfect competition? O Demand is sloping downward and tangent to ATC Demand is horizontal and tangent to the bottom of ATC O Demand is tangent to AVC O There are positive economic profits to motivate firms to keep producing
Economic theory would suggest that the profitability of an industry would be O inversely related to the number of firms competing in the industry. O unrelated to the number of firms competing in the industry. O zero in the long run, regardless of market structure. O directly related to the number of firms competing in the industry.
Equilibrium Market in the Short Run A competitive industry currently consists of 20 producers, all ofwhom operate with the identical short-run total cost curve STC(Q)= 16 + Q2. The market demand curve for bolts is D(P) = 110 − P. Allof each firm’s $16 fixed cost is sunk. What is a firm’s short-run supply curve? What is the short-runmarket supply curve? What are the short-run equilibrium priceand quantity in this industry?
What would be the short-run equilibrium quantity produced by this firm if the market price were $25?
The perfectly competitive farmer's profit maximizing level of output when price is $2 is ___ units of output Cost per unit 296 O 700 200 700 1000 200 0 MC 1000 ATC
MC АТС $25.00 AVC $19.50 -- $15.00 $12.50 - - 30 40 50 60 Output (Q) For the firm shown in the diagram above, its Long Run Supply Curve is its curve for any price greater than ATC; $19.50 MC; $12.50 AVC; $12.50 MC; $19.50
Price (S) AB UD A) $(60-C) × 3 Quantity B) $(60-D) x 2 OC) $(60-B) × 5 OD) $(60-B) × 4 O E) $(60 - A) × 5 MC ATC Refer to the figure above, which indicates the short-run cost data for a typical firm in a perfectly competitive industry. If the price faced by a perfectly competitive firm is equal to $60, then this firm will earn profits of......if it maximizes profits. p = $60 AVC
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t of 35 45 40 30 25 255 15 20 10 5 MC, AC MC AC 9 0 100 200 300 400 500 The graph shows average and marginal cost curves for a typical firm in a perfectly competitive industry in LONG-RUN equilibrium. The long-run equilibrium price of the product is $ In long-run equilibrium the firm will produce units. In long-run equilibrium the firm will earn $ economic profit.