The graphs in Figure 12-17 represent the perfectly competitive market demand and supply curves for the apple industry an demand and cost curves for a typical firm in the industry. Refer to Figure 12-17. Which of the following statements is true? The current market price is $3 but the price will increase in the future as the market demand increases. The current market price is $3 but the price will fall in the long-run as a

The graphs in Figure 12-17 represent the perfectly competitive market demand and supply curves for the apple industry an demand and cost curves for a typical firm in the industry. Refer to Figure 12-17. Which of the following statements is true? The current market price is $3 but the price will increase in the future as the market demand increases. The current market price is $3 but the price will fall in the long-run as a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the long-run equilibrium of a competitive market with identical firms, what are the relationships among price (P), marginal cost (MC), and average total cost (ATC)?
Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph
10. Figure 5 shows the graph of the short-run cost curves for Tim-T-Shirts, a firm operating in a perfectly competitive market. P* denotes the current price for Tim T-Shirts. Based on the information in the graph, which of the following should we expect in the long run? a) New firms will enter the market. b) The number of firms in the market will remain unchanged. c) Gray Sweaters will increase the current price of sweaters. d) There is not enough information to answer the question. Figure 5 Price and Costs P* MC ATC AVC Quantity
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A firm produces output according to the production function:Q = F(K, L) = 4K + 8L.a. How much output is produced when K = 2 and L = 3? unit(s)b. If the wage rate is $60 per hour and the rental rate on capital is $20 per hour, what is the cost-minimizing input mix for producing 32 units of output?Capital: Labor: c. If the wage rate decreases to $20 per hour but the rental rate on capital remains at $20 per hour, what is the cost-minimizing input mix for producing 32 units of output?Capital: Labor:
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If there were 20 firms in this market, the short-run equilibrium price of titanium would be $_______ per pound. At that price, firms in this industry would________ (operate at a loss/ shut down/ earn zero profit/ earn a positive profit). Therefore, in the long run, firms would ________ (enter/exit/ neither enter nor exit) the titanium market. Because you know that competitive firms earn ________ (zero/ negative/ positive) economic profit in the long run, you know the long-run equilibrium price must be $_____ per pound. From the graph, you can see that this means there will be ______ (10/ 15/ 20) firms operating in the titanium industry in long-run equilibrium.
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