Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 19QE
(a)
To determine
The quantity of output that is produced at $70.
(b)
To determine
Profit of the firm.
(c)
To determine
Expectation of the firm.
(d)
To determine
In a perfectly competitive market structure, the long-run
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
ion 5 of 20
The accompanying graph depicts the Marginal Cost (MC),
Average Cost (AC), Marginal Revenue (MR), and Demand
(D) curves for a competitive firm.
20
MC
a. Move point E to the profit maximiznig price and quantity
on the graph.
18
AC
16
b. What price should this firm charge to maximize profit?
14
12
D= MR
10
Profit-maximizing price: $
6
4
c. How many units should this firm produce to maximize
2
profit?
2
4
6
8
10
12
14
16
18
20
Quantity
Profit-maximizing output:
units
Price, MR, MC ($)
In the market for running shoes, all the firms face a similar demand curve and have similar cost curves to those of Smart in question 3.
a. What happens to the number of firms producing running shoes in the long run?
Answer:
b. What happens to the price of running shoes in the long run?
Answer:
c. What happens to the quantity of running shoes produced by Smart in the long run?
Answer:
d. What happens to the quantity of running shoes in the entire market in the long run?
Answer:
e. Does Smart shoes have excess capacity in the long run?
Answer:
f. Why, if Smart firm shoes has excess capacity in the long run, doesn’t the firm decrease
its capacity?
Answer:
g. What is the relationship between Smart Shoes’ price and marginal cost?
Answer:
The following graph summarizes the demand and costs for a firm that operates in a perfectly competitive market. a. What level of output should this firm produce in the short run? b. What price should this firm charge in the short run? c. What is the firm’s total cost at this level of output? d. What is the firm’s total variable cost at this level of output? e. What is the firm’s fixed cost at this level of output? f. What is the firm’s profit if it produces this level of output? g. What is the firm’s profit if it shuts down? h. In the long run, should this firm continue to operate or shut DOWN
Chapter 13 Solutions
Microeconomics
Ch. 13.1 - Prob. 1QCh. 13.1 - Prob. 2QCh. 13.1 - Prob. 3QCh. 13.1 - Prob. 4QCh. 13.1 - Prob. 5QCh. 13.1 - Prob. 6QCh. 13.1 - Prob. 7QCh. 13.1 - Prob. 8QCh. 13.1 - Prob. 9QCh. 13.1 - Prob. 10Q
Ch. 13 - Prob. 1QECh. 13 - Prob. 2QECh. 13 - Prob. 3QECh. 13 - Prob. 4QECh. 13 - Prob. 5QECh. 13 - Prob. 6QECh. 13 - Prob. 7QECh. 13 - Prob. 8QECh. 13 - Prob. 9QECh. 13 - Prob. 10QECh. 13 - Prob. 11QECh. 13 - Prob. 12QECh. 13 - Prob. 13QECh. 13 - Prob. 14QECh. 13 - Prob. 15QECh. 13 - Prob. 16QECh. 13 - Prob. 17QECh. 13 - Prob. 18QECh. 13 - Prob. 19QECh. 13 - Prob. 20QECh. 13 - Prob. 1QAPCh. 13 - Prob. 2QAPCh. 13 - Prob. 3QAPCh. 13 - Prob. 4QAPCh. 13 - Prob. 5QAPCh. 13 - Prob. 1IPCh. 13 - Prob. 2IPCh. 13 - Prob. 3IPCh. 13 - Prob. 4IPCh. 13 - Prob. 5IP
Knowledge Booster
Similar questions
- Marginal Revenue, Marginal Cost, Marginal Profit: MR=MC MC Marginal Profit 0 quantity (firm) 3:57 / 4:19 YouTube E} CC 74. In the video, when MC > MR, what action should the firm take to Maximize Profit. Select one: a. Increase Price b. Decrease Quantity c. Decrease Price d. Increase Quantity Check Costs & Revenuesarrow_forwardGraph the demand curve for a pure competitive firm, label the graph. What is the relationship between marginal revenue (MR) and the demand curve (is MR greater, equal, or less than the demand curve)?arrow_forwardThe graph illustrates the demand for Blue Sky surf boards and the firm's marginal revenue. On the graph, draw the marginal cost curve if the firm produces 150 surf boards a week. Label it. Draw a point at the intersection of the MC and MR curves. Draw a point to show the price of a Blue Sky surf board when the firm produces 150 surf boards a week. Draw an arrow to show the firm's markup. Label it. >>> Draw only the objects specified in the question. 750- 675- 600- 525- 450- 375- 300- 225- 150- Ģ 75- 0- 0 Price and cost (dollars per surf board) 50 100 150 Quantity (surf boards per week) Select Point 3-point Curve Double Arrow D MR 200 250arrow_forward
- Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Larry's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Larry produces. Calculate Larry's marginal revenue and marginal cost for the first seven shirts he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is…arrow_forwardA. If a firm operating in a perfectly competitive market doubles the amount it sells, what happens to the price of its output and its total revenue? B. How does a competitive firm determine its profit-maximizing level of output? When does a competitive firm decide to temporarily shut down in the short run? Explain, using the concepts of marginal cost, marginal revenue, price, and average variable cost.arrow_forwardPlease show working and calculations.arrow_forward
- In the long-run, a perfectly competitive firm will earn what kind of economic profit?arrow_forwardAs fast as you can please! Adrian decides to open a new ready-to-wear skirts brand. While making his study, he noticed that his fixed cost of production is 120 dollars. Following the information.Jacob wants to do a marginal analysis to help him decide if he shall enter the market. a. Define and find the shut-down price and the shut-down quantity for Jacob’s firm Explain the way you identify these two values. b. Find the marginal revenue and determine the quantity that maximizes Jacob’s output? Explain your answer and provide the formula. c. According to your calculations, what is your advice for Jacob? Should he stay or leave the market? Explain your answer. d. Calculate the value of the profit realized by the firm.arrow_forwardIf firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explainarrow_forward
- Q2. a. Create numbers for the table below TC TFC TVC AVC ATC MC 1 4 5 6 7 9 10 b. Indicate a market price that the firm will suffer from loss in the she run? What is the quantity level? What is the TR, TC and profit? Explanation: c. Indicate a market price that the firm will enjoy positive economic profits in the short run? What is the quantity level? What is the TR, TC and profit? Explanation: 2. 3.arrow_forwardThe graph shows the revenue and cost curves for an individual producer in the maple syrup industry. The demand for maple syrup increases and the market price rises to $40 a gallon. On the graph, draw the maple grower's marginal revenue curve and label it MR₁. Draw a point to show the grower's profit-maximizing price and quantity in the short run. Also show the grower's economic profit or economic loss in the short run and label it. >>> Draw only the objects specified in the question. Price and cost (dollars per gallon) 60 55- 50- 45- 40-40 35- 30- 25 100 200 300 400 500 MC ATC MRO 600 600 700 800 900 Quantity (thousands of gallons per year) B Select Line Point ☐ Rectanglearrow_forwardHow does a competitive firm determine the quantity that maximizes profit?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
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