When market conditions in a competitive industry are such that firms cannot cover their total production costs, then a) the firms will suffer long-run economic losses. Ob) the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. Oc) some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs. d) all firms will go out of business, since consumers will not pay prices that enable firms to cover production costs. their total

When market conditions in a competitive industry are such that firms cannot cover their total production costs, then a) the firms will suffer long-run economic losses. Ob) the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. Oc) some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs. d) all firms will go out of business, since consumers will not pay prices that enable firms to cover production costs. their total

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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HELP PLEASE!!! There are two questions here. 1. Is the firm maximizing profit? 2. What quantity of output should the firm produce in the long run?
Problem 2: Suppose in a perfectly competitive industry that the market supply and demand forces combine to produce a short-run equilibrium price of $70. Suppose further that a single firm in this industry has a weekly total cost function expressed by the equation: (b) TC=200+50q - 6q² + (1/3)q³. What is this firm's profit maximizing level of output? What are its profits? At what level of (q) will this firm shut down its operations? At what level of (q) will the firm break even.
I need solutions of d,e
QUESTION 6 Which of the following is a necessary condition for a firm to be able to bundle a new product with an existing one? consumers' willingness to pay for the two products are inversely related. the firm must operate in a perfectly competitive market. consumers must have a higher willingness to pay for the new product than for the older existing product. the two goods must be substitute products.
Suppose that the perfectly competitive for market for milk is made up of identical firms with long-run total cost functions given by: TC = 4q³-24 q² + 40 q Where, q = litres of milk. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exist the market freely. If the market demand is : 1. What is the long-run equilibrium price? Number Qd = 6,000 - 120 P 2. What is the quantity produced by each firm? Number 3. What is the number of firms in the industry? Number 4. Suppose that market demand increases to Qd = 11,000 - 157.14 P. What is the new long-run equilibrium number of firms? Number
Q4) Answer the following, providing a graphical illustration along with your answer where necessary: a) What is the profit maximising condition? b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market? c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A's payoff/Firm B's payoff) Firm A Price £2 Price £1 Assume you are the pricing manager at Firm A; i) ii) Price £2 £10,000/£10,000 £12,000/£5,000 Firm B Price £1 £5,000/£12,000 £6,000/£6,000 What is your payoff for a 'maximin' strategy? What is your payoff for a 'maximax' strategy? Does a dominant strategy exist within this prisoners' dilemma?
Give an explanation to the answer and ensure all the steps are shown.
A firm sells its product in a perfectly competitive market where other firms charge a price of $90 per unit. The firm’s total costs are C(Q) = 50 + 10Q + 2Q2. [NOTE à MC(Q) = 10+4Q] a) How much output should the firm produce in the short run? b) What price should the firm charge in the short run? c) What are the firm’s short run profits?
The canola farming industry is perfectly competitive. Assume that it is in long-run equilibrium at quantity Q0 and price P0. Assume also that it is a constant-cost industry. a) Draw a supply and demand diagram for the canola market showing this equilibrium b.) draw diagram for a typical canola growing farm in its initial long run equilibrium, showing its Marginal Cost, Average Total Cost, and Long Run Average Cost curves. Are there any profits being made by this firm?
Q6 (3 Points): Would a firm earning zero economic profit continue to produce (Perfectly competitive market), even in the long run? In long-run competitive equilibrium, a firm earning zero economic profit a- will continue to produce because such profit's as high a return as could be earned elsewhere. b- will not continue to produce because it could earn a better return in another industry. c- will not continue to produce because this return is not covering its opportunity costs. d- will not continue to produce because it would be better off shutting down. e- will not continue to produce because such profit corresponds with negative accounting profit.
The following figures depict the market supply and demand curves for a constant cost, competitive industry (left) and the per unit cost curves for a typical firm (right). For parts (a) and (c), below, you can again include your answers directly on the graph. A) Identify the short-run equilibrium in this market, indicating the price, aggregate quantity and the amount supplied by an individual firm. b) Explain why it is not a long-run equilibrium. c) Explain how the market would adjust to an equilibrium in the long-run
Perfectly Competitive market vs duopoly market Suppose the daily demand function of pizza in St Catherines Q^d=2175-5p. For 1 pizza store, the variable cost of making Qpizza per day is C(q)=0.2q^2 – 5q there is a 2000$ fixed cost. There is free entry in the long run a) What is the long run market equilibrium price and quantity in this market? How many firms in the market b) If the marginal cost decreased by 2$ per pizza what is the new short run market equilibrium price and quantity.c) Draw graphs to show the short run and the long run responses of both an individual firm and the market in part b. Now assume the market demand function does not change, consider duopoly market in which the marginal cost of each firm is 35. d) What is the nash equilibrium price and quantity in this Stackelberg model.