Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 6RQ
Subpart (a):
To determine
Relevance of perfect competition .
Subpart (b):
To determine
Relevance of perfect competition.
Subpart (c):
To determine
Relevance of perfect competition.
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Students have asked these similar questions
In a perfectly competitive market, each firm has a long-run total cost given by LTC = 100Q - 10Q² +
1/2Q³. What is the market's long-run equilibrium price?
00
O 50
O25
150
4
Price and costs (dollars)
20
10 L
O
10
20
MC
O always.
ATC
MR
40
30
Quantity (per day)
The figure above shows a perfectly competitive firm. In the short run, the firm will shut down
only if the AVC of producing 10 units is more than $20.
only if the AVC curve reaches its minimum before 10 units are produced.
only if the AVC of producing 10 units is less than $20.
Stuff, Incorporated is a firm with a total revenue of $1,000, marginal cost of $5, and average variable cost of $4. Both the output and input markets are
perfectly competitive and Stuff, Inc. is in long run equilibrium. Stuff, Inc.'s output and total fixed costs must be equal to which of the following?
O Output 200; Fixed Cost $200
O Output 200; Fixed Cost $400
O Output 200; Fixed Cost $800
O Output 250; Fixed Cost $800
O Output 250; Fixed Cost $400
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- Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by each firm in the industry is: LO10.3 a. A horizontal line at 2 cents per paper clip. b. A vertical line at 2 cents per paper clip. c. The same as the market demand curve for paper clips. d. Always higher than the firm’s MC curve.arrow_forwardA firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firm’s ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10 percent, then how big will each firm’s accounting profit per unit be?arrow_forwardThe following figure shows the revenue and cost curves for a firm X. RM 10 a. b. C. 7 6 LO 5 4 3.5 0 20 25 30 MC 40 AVC AC AR=MR Units If a firm X achieves productivity efficiency, what will be the total revenuel generated At what price will a firm stop operating? Please explain. If the market price is RM4.00, what is the total profit or total loss.arrow_forward
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