The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,200 for a ton of turnips, the firm is Select one: O a. making an economic profit. Ob. making zero economic profit. Oc. incurring an economic loss. O d. More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss.

The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,200 for a ton of turnips, the firm is Select one: O a. making an economic profit. Ob. making zero economic profit. Oc. incurring an economic loss. O d. More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm facing a demand curve will have zero quantity demanded if it raises its price above the market price. a. perfectly elastic O b. relatively elastic O c. relatively inelastic O d. perfectly inelastic A perfectly competitive firm is breaking even. In the short run it should In the long run it should a. produce where MC = MR; keep the same production level O b. produce where MC = MR; leave the industry O c. shut down; exit the industry O d. shut down; expand
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
Solve the attahment.
Brody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.-Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer. -At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work. -Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200. -Brody's profit-maximizing quantity of saxophones -Brody's loss, completely shaded Quantity Total Variable cost 6 $120 7 $145 8 $165 9 $220 10 $290 11 $390
In the short run, profits when a competitive firm shuts down are-$8200, and they are -$350 when the firm continues to produce. This firm will minimize losses in the short run by Choose one: A. either shutting down or continuing to produce. O B. continuing to produce. O C. shutting down.
In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut sells for the market price of $0.75 and they sell out every day. Assume that this company has labor costs of $275 and materials costs of $400. a. At what price would this donut shop shutdown in the short run? b. Using only variable costs, what is the donut shop’s daily profit? - Now assume that the owner is thinking of adding a second location downtown. The capital investment required is $4,000. The normal rate of return is 5%. c. If the new shop could operate under the same conditions as the original location is it a good business decision to expand?
The optimal output rule for a perfectly competitive firm is to produce that quantity where A. P = MC in the long run, but in the short run to produce that quantity where MC = %3D ATC. O B. MC = ATC in the short run. C. P = MC no matter what the time period, provided that price is greater than average variable cost. D. P = MC no matter what the time period, provided that price is greater than %3D average total cost.
Which of the following is an expression of profit for a perfectly competitive firm? Profit for a perfectly competitive firm can be expressed as ⒸA. Profit=(PxQ)-(TCxQ), where P is price, Q is output, and TC is total cost. OB. Profit=P-MC, where P is price and MC is marginal cost. OC. Profit=PxQ, where is price and Q is output. O D. Profit=P-ATC, where P is price and ATC is average total cost. O E. Profit= (P-ATC) XQ, where P is price, Q is output, and ATC is average total cost.
Time left 1:12:53 A firm's total short-run cost function is C(y) = 12y³ – 8y? + 30y + 12. At what price will the firm agree to produce assuming that the marginal cost is known? O a. $8.33 b. $28.67 O. $11.68 O d. None of the above Clear my choice
Is my answer correct? i think you need information about the AVC to answer this question. I know the firm is productive at a loss, but in order to decide whether or not the firm should shut down, you have to know whether or not price is above or below AVC, right?
Because perfectly competitive firms are price takers, a permanent increase in the market demand does not change the price of the product in either the short run or long run. O A. True O B. False
Suppose we have a firm in a perfectly competitive market. Assume that we have the usual shaped cost curves. At a market price of $15 the profit maximizing firm produces 53 units. Something changes that causes the firm to produce a quantity of zero at a price of $15 in the short-run. Which of the changes below can explain the change in the firm's behavior? O An increase in the fixed cost and a decrease in the marginal cost. O An increase in the fixed cost. O An increase in the marginal cost. O A decrease in the market price.