Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337378710
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 14, Problem 6QR
To determine
The competitive firm’s price that is equal to marginal cost in the short run and the long run.
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Does a competitive firm’s price equal the minimumof its average total cost in the short run, in the longrun, or both? Explain.
Consider the perfectly competitive market for tofu. Many people use tofu as a substitute for meat.
Starting from long-run equilibrium, show graphically what happens in the short and long run to q. Q, P, and in the market for tofu (in comparison to the starting point) if the price of meat is increasing.
What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive firm?
Chapter 14 Solutions
Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
Ch. 14.1 - Prob. 1QQCh. 14.2 - How does a competitive firm determine its...Ch. 14.3 - Prob. 3QQCh. 14 - Prob. 1CQQCh. 14 - Prob. 2CQQCh. 14 - Prob. 3CQQCh. 14 - Prob. 4CQQCh. 14 - Prob. 5CQQCh. 14 - Prob. 6CQQCh. 14 - Prob. 1QR
Ch. 14 - Prob. 2QRCh. 14 - Prob. 3QRCh. 14 - Prob. 4QRCh. 14 - Prob. 5QRCh. 14 - Prob. 6QRCh. 14 - Prob. 7QRCh. 14 - Prob. 8QRCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Prob. 4PACh. 14 - Prob. 5PACh. 14 - A firm in a competitive market receives 500 in...Ch. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Suppose that each firm in a competitive industry...
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- How does a competitive firm determine the quantity that maximizes profit?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_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forward
- In a perfectly competitive market, how do we go from a short run equilibrium to a long run equilibrium?arrow_forwardIf new technology in a perfectly competitive market brings about a substantial reduction in costs of production,how will this affect the market?arrow_forwardAccording to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?arrow_forward
- A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How “small” is “small”?arrow_forwardWhat are the characteristics of a perfectively competitive market?arrow_forwardDescribe how we can identify a competitive firm’s short-run supply curve.arrow_forward
- Give an example of a price at which this firm would want to produce and sell output in the short run, but not in the long run.arrow_forwardHow is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?arrow_forwardWhat does zero economic profits in the long-run mean to the owner of a business operating in a perfect competitive market?arrow_forward
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