Foundations of Economics, Student Value Edition (8th Edition)
8th Edition
ISBN: 9780134489230
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 17, Problem 3SPPA
To determine
To calculate:
The quantity,
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In the short run, what quantity does Lite and Kool produce, what price does it charge, and does it make an economic profit?
The figure below shows the situation facing Smart Digit, Inc, a firm in monopolistic competition
that produces calculators. What is the firm's economic profit per day?
20
16
MC
ATC
12
MR
100
200
300 400 500
600
Quantity (calculators per day)
00
4.
Price and costs (dollars per calculator)
Consider the diagram below depicting the revenue and cost conditions faced by a monopolistically competitive firm, and then answer
the following questions.
$40
$35
$30
MC
ATC
$25
$20
$17 A
$15
$10
4.40
$5
3.25
MR
Demand
3
4
5
7
8 9 10
Quantity
Instructions: Round your answers to 2 decimal places.
a. What is total revenue for this firm?
$56.88
b. What is total cost for this firm?
$ $58.88
c. What is this firm's economic profit?
d. This firm is most likely In long-run
]equilibrlum because
Instructions: In order to recelve full credit, you must make a selection for each option. For correct answer(s), click the box once to
place a check mark. For Incorrect answer(s). click the option twice to empty the box.
? P= ATC.
? P> MC.
? MR = MC.
2 the firm is experlencing normal profits.
2 the firm is experlencing economic profits.
7 demand exceeds marginal revenue.
Price and costs
Chapter 17 Solutions
Foundations of Economics, Student Value Edition (8th Edition)
Ch. 17 - Prob. 1SPPACh. 17 - Prob. 2SPPACh. 17 - Prob. 3SPPACh. 17 - Prob. 4SPPACh. 17 - Prob. 5SPPACh. 17 - Prob. 6SPPACh. 17 - Prob. 7SPPACh. 17 - Prob. 8SPPACh. 17 - Prob. 9SPPACh. 17 - Prob. 10SPPA
Ch. 17 - Washtenaw Dairy in Ann Arbor, Michigan, sells 63...Ch. 17 - Prob. 2IAPACh. 17 - Prob. 3IAPACh. 17 - Prob. 4IAPACh. 17 - Prob. 5IAPACh. 17 - Use the following information to work Problems 5...Ch. 17 - Prob. 7IAPACh. 17 - Prob. 8IAPACh. 17 - Prob. 9IAPACh. 17 - Prob. 1MCQCh. 17 - Prob. 2MCQCh. 17 - Prob. 3MCQCh. 17 - Prob. 4MCQCh. 17 - Prob. 5MCQCh. 17 - Prob. 6MCQCh. 17 - Prob. 7MCQ
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- QUESTION 7 The graph below summarizes the demand and costs for a firm that operates under a monopolistically competitive market. Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below. $ 220 MC 200 - 180 - 160 - ATC 140 - 120- 100 - 80 - 60 40 - 20- MR 2 4 8 10 12 14 16 18 20 22 24 26 Quantity a. What level of output should this firm produce in the short run? units. b. What price should this firm charge in the short run?P = $ c. What is the firm's total cost at this level of output? TC = d. What is the firm's profit if it produces this level of output? Profits = $ g. What adjustments should the manager be anticipating? (А, В, С, or D). A. Demand will remain unchanged over time. B. Demand will decrease over time as new firms enter the market. C. Demand will increase over time as firms exit the market. D. Demand will increase over time a new firms enter the market.arrow_forwardplease answer letter D only and provide with complete and neat solution thank youarrow_forwardWhat is the main difference between a perfectly competitive industry and a monopolistically competitive industry? Select one: a. zero economic profit expected in the long run b. the number of firms in the market c. no barriers to entry d. product differentiationarrow_forward
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