Which of the following statements in the full competitive market is correct?Choose an answer1. The companies maximize their profit according to the rule «price equalsaverage total costs».O 2. The companies maximize their profit according to the rule "marginal costs equalaverage total costs".3. In the short term, the companies always make a profit.O 4. In the short-term market result, it always applies that the market price is above the averagetotal costs.5. In the long-term market result, the market price corresponds to the average total costs.

In a competitive market, firms face a very high degree of competition that affects their gain from…

Answered: Which of the following statements in…

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

Market demand is Qd = 100 - p. Market supply is Qs = 4p. A competitive firm has MC = 2Q. How many firms are currently in the industry? %3! %3D %3! O 10 O 2 4.
Which of the following statements is TRUE? O Assume that wheat farmers operate in a competitive industry. A decrease in the cost of producing wheat will lead to greater profits for wheat farmers in the long run than in the short run. O A rational decision maker will never take sunk costs into account. A change in price will have no effect on total revenue when the own-price elasticity of demand is zero. O (From the perspective of the consumer) When the fixed fee increases, the quantity consumed will always decrease.
2
AVC, ATC,MC 110 80 76 " 50 40 30 29 18 MC ATC 1234567H0 11 12 13 14 Output per period O a Loss of $90 O b. Profit of $180 O c. 50 Od. Profit of $6300 The Competitive Industry and Firm Refer to the figure above to answer this question for a representative firm in a perfectly competitive market. Suppose that the market price is $70. What is the firm's maximum profit (or minimum loss)?
1
Price $70 5.50 530 $10 Demand 10 20 30 40 50 60 70 Quantity If this firm were to sell 20 units of output, its marginal revenue would be O $40 O $600 O $30. O $1,000
Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $8 per unit, the firm should produce O less than 100 units of output. O The amount is impossible to determine from the information given. O 100 units of output. O more than 100 units of output.
If a graph is used to compare total revenue and total cost of a perfectly competitive firm, then the horizontal axis of the graph will represent the and the vertical axis will represent OA. price, measured in dollars; quantity of goods produced O B. total costs measured in dollars; quantity of goods produced O C. quantity produced; both total revenue and total costs, measured in dollars. O D. quantity produced; total revenue and total variable costs, measured in dollars.
Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. O b. decrease their output. Oc make no adjustments as they are already maximizing their profits. Od. increase their output. Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where…
Economics Which of the following will influence the level of competition in an industry? O A. A new product that fills a consumer need better. O B. Competition from other firms in the form of better customer service. C. The bargaining power of suppliers. D. The bargaining power of buyers. E. All of the above.
The table shown displays the total costs for various levels of output for a firm operating in a perfectly competitive market. Price $50 $50 $50 $50 $50 $56 When one unit is produced exceed O marginal costs, marginal revenue, more O marginal revenue; marginal costs more O marginal revenue, marginal costs; less Omarginal costs, marginal revenue, less and the fem should produce Quantity 0 1 2 3 4 15 TC $10.00 $20.00 $2750 $77 50 $147.50 $250 00
9. If market price is $20 and the firm maximizes profit (minimizes loss), how much profit will the firm earn? $ $100 $1,200 580 140 540 120 O $1,200 O$4,800 -$6,000 4 130 150 MC 180 212 240 370 100

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS