Which of the following statements best depicts what will happen to this firm in the long run? O The firm will continue to earn profit in the long run. New firms will enter and cause this firm to earn a loss to balance the previous profits earned by the firm. New firms enter the market, causing the price to fall until zero profit is earned by all firms in this industry. O The firm will produce more wheat than it currently does until the MC = ATC and it breaks even.

Which of the following statements best depicts what will happen to this firm in the long run? O The firm will continue to earn profit in the long run. New firms will enter and cause this firm to earn a loss to balance the previous profits earned by the firm. New firms enter the market, causing the price to fall until zero profit is earned by all firms in this industry. O The firm will produce more wheat than it currently does until the MC = ATC and it breaks even.

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

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 $20 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. of
Suppose a firm is in a perfectly competitive market. 10 Price 9- 8 4.5³ 3.5 MC ATC AVC 123 4 5 6 7 8 Quantity Suppose currently price is $6, what will happen in the long run? O Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. O Individual firms will earn positive economic profits for now, which will entice other firms to enter the industry in the long run. O Individual firms will earn negative economic profits for now, which will cause some firms to exit the industry in the long run. O Because the price is below the firm's average variable costs, the firms will shut down.
(J) Canadian red wheat is a normal good, in a perfectly competitive market which is in long run equilibrium. There occurs a boon in the economy and income rises. What effect does this have on short run equilibrium price and equilibrium quantity? Draw a short run industry graph showing the change described above. Remember to label every curve, label your axes, and demonstrate the resulting changes in the axes.
Please help me
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
Consider a perfectly competitive market for a product Y and assume that the market is at the long run equilibrium. (a) Examine the cost structure and demand faced by an individual Y producer. Relate that producer to the Y market at the perfectly competitive long run equilibrium. Support with market and individual producer diagrams. (b) Analyze the effects of the following news on price and quantity in the Y market as well as the profit and output of the individual Y producer “It is discovered that consuming Y is beneficial to health and can prolong your life”. Explain both the short run and the long run equilibria and support your answers with suitable diagrams. Hi, I have the answer sheet but may I request for a more detailed explanation for part b? Thank you.
3] Assume several identical firms have the short run production function Q = √40L and pay a wage of 10 for each unit of labor employed. Fixed costs for each firm are 100. The market demand for the good is Qd = 100,000.25P. How many firms are in the industry in the long run?
In the long run, competition among sellers results in all of the following EXCEPT O increases in the price investment increases in the quantity O innovation
At the current short-run market price, firms will __________ in the short run. In the long run, ____________ the market given the current market price.
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?
Don't used pen paper
If there were 10 firms in this market, the short-run equilibrium price of steel would be $______per ton. At that price, firms in this industry would ______(shut down/operate at a loss/ earn a positive profit/ earn zero profit). Therefore, in the long run, firms would__________(enter/ exit/ neither enter nor exit) the steel 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 ton. From the graph, you can see that this means there will be_____(10/20/30) firms operating in the steel industry in long-run equilibrium.