EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 13.3, Problem 3QQ
To determine
The
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Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this
market.
Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
100
90
Profit or Loss
80
70
60
40
ATC
30
20
MC
AVC
10
10
20
30
40
50
60
70
80
90
100
QUANTITY (Thousands of sweaters per day)
In the short run, at a market price of $45 per sweater, this firm will choose to produce 45,000
sweaters per day.
On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $45 and
the firm chooses to produce the quantity you already selected.
Note: In the following question, enter a positive number, even if it represents a loss.
The area of this rectangle indicates that the firm's
would be
thousand per day in the short run.
PRICE (Dollars per sweater)
Identification. Answer the following questions below.
QUESTIONS:
1.) What is under allocation of resources?
2.) What can eliminate economic profit in the long run?
3.) What can eliminate costs in the long run?
Suppose that the market for air fresheners is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
40
36
Profit or Loss
32
28
ATC
AVC
MC
4
2
4
6
10
12
14
16
18
20
QUANTITY (Thousands of air fresheners per day)
In the short run, at a market price of $20 per air freshener, this firm will choose to produce
v air fresheners per day.
On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and
the firm chooses to produce the quantity you already selected.
Note: In the following question, enter a positive number, even if it represents a loss.
The area of this rectangle indicates that the firm's v would be $
thousand per day in the short run.
PRICE (Dollars per air freshener)
Chapter 13 Solutions
EBK ESSENTIALS OF ECONOMICS
Ch. 13.1 - Prob. 1QQCh. 13.2 - How does a competitive firm determine its...Ch. 13.3 - Prob. 3QQCh. 13 - Prob. 1QRCh. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QR
Ch. 13 - Prob. 8QRCh. 13 - Prob. 1QCMCCh. 13 - Prob. 2QCMCCh. 13 - Prob. 3QCMCCh. 13 - Prob. 4QCMCCh. 13 - Prob. 5QCMCCh. 13 - Prob. 6QCMCCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - Prob. 6PACh. 13 - A firm in a competitive market receives 500 in...Ch. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PACh. 13 - Prob. 11PACh. 13 - Prob. 12PA
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