The industry in the figure below consists of many firms with identical cost structures, and the industry experiences constant scale. Consider a change in demand from D₁ to D2, which increases price from $20 to $30 in the short run. Market Price $50 $40 $30 $20 $10 10 20 30 D₁ 40 Quantity S₁ D₂ 50 60 70 Tools LRS O S₂ Instructions: Enter your answers as a whole number. a. Draw the new short-run market supply curve that will occur in response to the increase in demand and increase in price. Instructions: Use the tool provided 'S2' and be sure your supply curve includes the new equilibrium price and quantity. b. Draw the long-run supply curve. Instructions: Use the tool provided 'LRS' and plot only the endpoints over the entire range of output (0-60). The new equilibrium price is $ 20 and the new equilibrium quantity is 40

The industry in the figure below consists of many firms with identical cost structures, and the industry experiences constant scale. Consider a change in demand from D₁ to D2, which increases price from $20 to $30 in the short run. Market Price $50 $40 $30 $20 $10 10 20 30 D₁ 40 Quantity S₁ D₂ 50 60 70 Tools LRS O S₂ Instructions: Enter your answers as a whole number. a. Draw the new short-run market supply curve that will occur in response to the increase in demand and increase in price. Instructions: Use the tool provided 'S2' and be sure your supply curve includes the new equilibrium price and quantity. b. Draw the long-run supply curve. Instructions: Use the tool provided 'LRS' and plot only the endpoints over the entire range of output (0-60). The new equilibrium price is $ 20 and the new equilibrium quantity is 40

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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
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
Question 25 Use the graph below to answer the following question: MC AVC # Q5 P4 P3 Ⓡ P2 ↑Price P1 Q1Q2 Q3 Q4 ATC Quantity If the market price is less than P3 and greater than P2, in the short run, the perfectly competitive firm will earn O positive economic profit zero economic profit. O negative economic profit and shut down. O negative economic profit but continue to produce output.
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?
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.
18 Market Representative Firm MC i of A a $7 MR = P ATC b $5 AVC $2 D1 18,000 70 100 115 Quantity (Q) Output (Q) The diagram above shows a Perfectly Competitive market on the left, and a representative firm supplying in that market on the right. In the long run we would expect the market and the Price to Select one: a. existing firms to exit; increase b. new firms to enter; increase С. new firms to enter; decrease d. existing firms to exit; decrease Price $$$
t of 40 40 35 55 30 25 25 20 15 10 5 MC, AC MC AC 9 0 100 200 300 400 500 The graph shows average and marginal cost curves for a typical firm in a perfectly competitive industry in LONG-RUN equilibrium. The long-run equilibrium price of the product is $ In long-run equilibrium the firm will produce units. In long-run equilibrium the firm will earn $ economic profit.
The following figure shows the marginal cost curve, average total cost curve, average variable cost curve, and marginal revenue curve for a firm for different levels of output. Price R W S L 0 A F B G C M At the profit-maximizing level of output: MC ATC AVC MR Quantity a. the firm is earning economic profit. b. profits per unit are the highest relative to all other output choices. c. profit equals ZC. d. costs exceed revenue.
Typed please
20 MC I of d P4 ATC AVC P3 P2 a P1 Q, Q2 Q3 Output (Q) The diagram above shows cost curves for a Perfectly Competitive firm. In the short-run, its Short-Run Supply Curve is its MC curve at prices higher than: Select one: а. P4 b. P2 C. P3 d. P1 $$
Looking to see how to resolve
Consider the figure below displaying the cost curves of a competitive firm. In the SHORT-run, at p₁ the firm will at p2 the firm will at på the firm will and at p4 the firm will $ P1 P2 P3 P4 ‒‒‒‒‒‒ 91 92 93 94 MC AC AVC 95 A. make normal profit; make no profit; make losses; exit B. make losses; makes supernormal profit; make normal profit; make losses C. make supernormal profit; make normal profit; make losses; shut down D. exit; make normal profit; enter; shut down E. always make some profit