Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 10P
To determine
The reasons for zero economic profits in long run for a
Why there is no economic profit or loss in the perfectly competitive industry.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Hello, can I get help with the last three parts of this question?
(Table: Total Cost and Output for All-Natural Frozen Yogurt) Use Table: Total Cost and Output for All-
Natural Frozen Yogurt, which describes Sasha's total costs for his perfectly competitive all-natural frozen
yogurt firm. How many tubs of frozen yogurt will Sasha produce in the long run?
Table: Total Cost and Output
for All-Natural Frozen
Yogurt
Output
Total Cost
0
$10
1
60
2
80
3
110
4
170
5
245
02
3
4
(The Short-Run Firm Supply Curve) Each of the followingsituations could exist for a perfectly competitive firm inthe short run. In each case, indicate whether the firmshould produce in the short run or shut down in the shortrun, or whether additional information is needed to determinewhat it should do in the short run.a. Total cost exceeds total revenue at all output levels.b. Variable cost exceeds total revenue at all output levels.c. Total revenue exceeds fixed cost at all output levels.d. Marginal revenue exceeds marginal cost at the currentoutput level.e. Price exceeds average total cost at all output levels.f. Average variable cost exceeds price at all output levels.g. Average total cost exceeds price at all output levels.
Knowledge Booster
Similar questions
- 20.Suppose a demand for good produced by a certain industry changes then answer the following questions:1- What will be the affect of change in demand on the output of the firm and industry in short run?2- What will be the affect of change in demand on the output of the firm and industry in long run?3-For what reason the affect of change in demand on firm's and industry's output differ in short and long run?4- Will the condition of zero economic profit be met in long run? how?arrow_forwardDear Expert pro Hand written solution is not allowed.arrow_forward(Figure: Big Tree Organic Farms in the Short Run) Use Figure: Big Tree Organic Farms in the Short Run. Big Tree Organic is a perfectly competitive organic farm in Turlock, California. If the market price is G, the farm's total cost of producing its most profitable level of output is: Price G F EN S 0 OBS. DK. OFKD. OESB. H L MC ATC AVC B D Quantity (per period) MRarrow_forward
- (Exhibit: A ) The firm will shut down in the short run if the price falls below: 0G. 0F. 0E. 0P. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.arrow_forwardMy dear good expert hand written not allowed.arrow_forwardQuestion When do firms decide to shut down production in the short run? Explain it. How is the short run average cost curve and the long run average cost curve shaped? What is the difference between them? Graphical representation of the short-run total cost curve showing total cost, fixed cost, variable cost: and The marginal cost and average total cost:arrow_forward
- 2. Assume that the above cost data is for a perfectly competitive firm. Using this data answer the following: (See Atteched) (a) If the market equilibrium price that this firm charges is $50, what level of output must this firm produce to maximize its profit? (b) What would be the amount of profit that this firm would earn if it produced at the profit-maximizing level of output? 3. You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? a. The prices of agricultural products b. The profits of farmers c. The equilibrium output in agricultural markets d. The number of farms 4. Distinguish between economies of scale and diseconomies of scale. Give examples of why a firm may experience economies of scale. editarrow_forwardTyped plzzzz And Asaparrow_forwardQuestion 15 (1 point) V Saved Suppose that a perfectly competitive firm's total cost function is TC = q² + 20q+ 256, where q is the firm's output level. What is the firm's output level (q*) in the long run? %3D q* = 10 units. q* = 16 units. %3D q* = 20 units. %3D q* = 25 units. ONone of the above.arrow_forward
- S IC raw Calculate the new total revenue and new marginal revenue product if the price of strawberries doubled (from $2 to $4 per box), and then answer one question. Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Number of Pickers (per Hour) 0 1 2 3 4 5 6 7 8 9 Total Strawberry Output (Boxes per Hour) 0 5 10 14 17 19 20 20 18 15 Price of Strawberries (per Box) $2 2 2 2 2 2 2 222 Total Revenue (per Hour) $0 10 20 28 34 38 40 40 36 30 Marginal New Price Revenue of Product Strawberries $10 10 8 6 4 NO 2 0 -4 -6 $4 4 4 4 4 4 4 4 4 4 New Total Revenue (per Hour) $ $ $ $ $ $ $ $ $ $ How many pickers would be hired at $2 an hour before the price change? picker(s) New Marginal Revenue Product 0 20 $ 40 $ 56 $ 68 $ 76 80 $ 80 $ 72 $ 60 $ www 20 20 16 12 8 4 0 -8 -12arrow_forwardQ23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.arrow_forwardNote: Don't use chat gpt.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
