Comparing low profit and high profit industry.

Question

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Answer 1

Question

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

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The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 8 MC ATC MR 30 D 45 50 Quantity/time The firm will maximize its profit at a quantity of units. After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is S The maximum profit the firm can earn in this situation is $ per unit for this output. How will the situation change over time? Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. ◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. This market is already in long-run equilibrium, and will not…

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Answer 2

Question

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

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Answer 4

Question

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

Answer 6

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Answer 7

Chapter 12, Problem 1FT

Subpart (a):

To determine

Comparing low profit and high profit industry.

Answer 8

Subpart (a):

Expert Solution

Explanation of Solution

If low profit industry (L) and high profit industry (H) has similar cost, the price charged is different in both industries. The profit is higher in industry “H”, thus the price charge in high profit industry is higher than in low profit industry.

Answer 9

Subpart (a):

Expert Solution

Answer 10

Subpart (a):

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Concept introduction:

Profit: Profit refers to the excess revenue after subtracting the total cost from the total revenue

Answer 13

Subpart (b):

To determine

Comparing low profit and high profit industry.

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Answer 14

Subpart (b):

To determine

Comparing low profit and high profit industry.

Answer 15

Subpart (b):

Expert Solution

Explanation of Solution

Comparing the value of output in both industries, it is higher in industry H than L.

Answer 16

Subpart (b):

Expert Solution

Answer 17

Subpart (b):

Expert Solution

Answer 18

Expert Solution

Answer 19

Subpart (c):

To determine

Comparing low profit and high profit industry.

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Answer 20

Subpart (c):

To determine

Comparing low profit and high profit industry.

Answer 21

Subpart (c):

Expert Solution

Explanation of Solution

If the labor and capital are moved from L industry to H, it will give up the low valued goods and gained high valued goods.

Answer 22

Subpart (c):

Expert Solution

Answer 23

Subpart (c):

Expert Solution

Answer 24

Expert Solution

Answer 25

Subpart (d):

To determine

Comparing low profit and high profit industry.

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Answer 26

Subpart (d):

To determine

Comparing low profit and high profit industry.

Answer 27

Subpart (d):

Expert Solution

Explanation of Solution

The cost of production in is different in both industries. High profit industry has low cost and low profit industry has high cost, because generally high profit industries are technologically advanced, thus they need less cost to produce goods. This is exactly differing in low profit industries, they are already running in low profit and it is difficult for them to adopt new low cost technological production methods.

Answer 28

Subpart (d):

Expert Solution

Answer 29

Subpart (d):

Expert Solution

Answer 30

Expert Solution

Answer 31

Subpart (e):

To determine

Comparing low profit and high profit industry.

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Answer 32

Subpart (e):

To determine

Comparing low profit and high profit industry.

Answer 33

Subpart (e):

Expert Solution

Explanation of Solution

If the cost of production is low in industry H, they require lower amount of capital and labor than industry L.

Answer 34

Subpart (e):

Expert Solution

Answer 35

Subpart (e):

Expert Solution

Answer 36

Expert Solution

Answer 37

Subpart (f):

To determine

Comparing low profit and high profit industry.

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.

Answer 38

Subpart (f):

To determine

Comparing low profit and high profit industry.

Answer 39

Subpart (f):

Expert Solution

Explanation of Solution

If the capital and labor are shift from low profit industry L to high profit industry H, there is small unit of output are given up in L than are gained in industry H.