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When is the profit a firm earns equal to the
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- List the requirements for a perfectly competitive goods market.Are US markets becoming less competitive and, therefore, less efficient?A subsidy is defined as a payment that must be made to the government whenever a good or service is sold. the number of trades that are eliminated from a market when a tax is imposed. O the difference between total revenue and total cost for a business firm. a payment to either the buyer or seller of a good or service, usually on a per-unit basis, when a good or service is purchased.
- Consider the perfectly competitive market for fire extinguishers in the town of Emberton. The demand for fire extinguishers is Pp = 100 – 2Q and the supply of fire extinguishers is Ps = 10 + Q. The equilibrium price in this market is P = $40 and at that price, 30 fire extinguishers are bought and sold. Suppose the government of Emberton imposes a $6 per unit tax on fire extinguishers. Under this tax fire extinguishers are bought and sold. Of the $6 tax, V will be borne by consumers and v will be borne by producers. The tax causes consumer surplus to change from an initial level of V to a new level ofThe following graph plots daily cost curves for a firm operating in the competitive market for demin overalls. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per overalls) 50 10 10 5 0 MC 2 ATC 8 18 QUANTITY (Thousands of overallises per day) AVC 10 20 Profit or Loss In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm. $ overallses.you and the other hamburger shops that just opened in the area are selling the same basic hamburgers. Every other shop is selling their hamburger for 2.00$ per hamburger. you are now a price taker in a perfectly competitive market where the price of a hamburger is 2.00$
- The graph above shows the perfectly competitive market for apples. The quantity is measured in millions of apples per week. Identify whether each of the following would be true or false and briefly explain your reasoning. The demand curve facing an individual apple grower is perfectly elastic at $4 per apple. If an individual apple grower decided to stop growing apples then the market supply curve for apples would shift to the left and the market price for apples would increase. If an individual apple grower sold one more apple, the price effect would cause the marginal revenue from that apple to be less than the price.Determine the output level that will create zero economic profit.The graph illustrates the situation facing the publisher of the only newspaper containing local news in an isolated community. If the newspaper market were perfectly competitive, what would be the quantity, price, consumer surplus, and producer surplus? Draw a point at the equilibrium quantity and equilibrium price if this market is perfectly competitive. Draw and label the consumer surplus. Draw and label the producer surplus. 100- 80- 60- 40- 20- 0- Price and cost (cents per newspaper) 0 MC 100 D 200 300 400 Quantity (newspapers per day) >>> Draw only the objects specified in the question. 500 Q
- A kid wants to open a lemonade stand in their neighborhood. They would have elastic supply because O Lemonade takes a long time to produce O They can only produce one product O The product has to be sold from their house They have flexible inputsIn competitive markets economic profit becomes zero in the long-run. However, it is also possible for some firms to earn a greater accounting profit and to enjoy a higher producer surplus than other firms. How is it possible?Consider a perfectly competitive world, the demand and supply are given by Qd = 20 – 3*P and Qs = 4*P. If the price is $10 How much is the excess supply or the excess demand?
