The quantity of output that is produced at $70.

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Answer 1

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 equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

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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

Answer 2

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 equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

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Answer 3

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 equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

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Answer 4

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 equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

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Answer 5

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 equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

Answer 6

Chapter 13, Problem 19QE

(a)

To determine

The quantity of output that is produced at $70.

Answer 7

Chapter 13, Problem 19QE

(a)

To determine

The quantity of output that is produced at $70.

Answer 8

(b)

To determine

Profit of the firm.

Answer 9

(b)

To determine

Profit of the firm.

Answer 10

(c)

To determine

Expectation of the firm.

Answer 11

(c)

To determine

Expectation of the firm.

Answer 12

(d)

To determine

In a perfectly competitive market structure, the long-run equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

Answer 13

(d)

To determine

In a perfectly competitive market structure, the long-run equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 13.1 - Prob. 1Q Ch. 13.1 - Prob. 2Q Ch. 13.1 - Prob. 3Q Ch. 13.1 - Prob. 4Q Ch. 13.1 - Prob. 5Q Ch. 13.1 - Prob. 6Q Ch. 13.1 - Prob. 7Q Ch. 13.1 - Prob. 8Q Ch. 13.1 - Prob. 9Q Ch. 13.1 - Prob. 10Q

The quantity of output that is produced at $70.

Solution Summary: The author explains that a firm under perfect competition produces 500 units of output at 70 per unit.

The quantity of output that is produced at $70.

Profit of the firm.

Expectation of the firm.

In a perfectly competitive market structure, the long-run equilibrium price or marginal cost will be equal to the average total cost (Price = MC = ATC). At this level, the equilibrium price will be $40, where the firm earns only zero economic profit (normal profit).

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Chapter 13 Solutions