Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 8, Problem 12SQ
To determine
The profit of the firm producing below
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Students have asked these similar questions
A profit-maximizing firm in a competitive market is currently producing 500 units of output. It has
average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b.
What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more
than, less than, or exactly 100 units?
Which of the following will cause the purely competitive firm to stop operations?
A. the price can no longer cover the variable cost
B. the price can cover the variable cost and half of the fixed cost
C. the price can cover both the variable and the fixed costs but there is no economic profit
D. the firm is realizing economic profit
E. no correct answer
In the short run, a perfectly competitive firm can
Select one:
a.
earn an economic profit.
b.
earn an economic profit, earn a normal profit, or incur an economic loss.
c.
earn a normal profit.
d.
incur an economic loss.
Chapter 8 Solutions
Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- Price Average total cost AVC Demand Marginal cost Marginal revenue Q Quantity Discuss the firm plotted on the figure. What type of firm do you see?is the firm operating at the optimal point of production? is the firm making a proht? s the firm operating in the short or in the long run?arrow_forwardAt what point should firms shut down in the short run? a. when marginal revenue equals marginal costs b. when average revenue is below average costs c. when average revenue is above average total cost d. when average revenue is below average variable costsarrow_forwardRefer to the figure above for the perfectly competitive firm. If the market price is $300, the firm will have: a. normal profit b. economic profits c. economic losses but will continue to operate in the short run d. economic losses and will shut down in the short run e. none of the abovearrow_forward
- Show all the work clear handwriting Suppose the market price of a good is $20 and TC=0.5Q2. A. What Q should a profit maximizing perfectly competitive firm choose? B. What are profits? C. Draw a graph that shows the short run choice of Q, revenue and profits.arrow_forwardThe table below displays cost information for a firm operating in a perfectly competitive market. Assume all firms in this market have identical costs. a. Fill in the missing values corresponding to the empty cells. Quantity Total Cost Variable Cost Marginal Cost Average Variable Cost 1 $10 A $10 2 $38 $8 3 $44 $24 B 4 C $30 5 $38 $7.6 6 $68 D E 8 7 $60 8 $74 F A = $ B = $ C = $ D = $ E = $ F = $ b. Calculate the lowest price the firm would need to be able to sell their goods for in order to remain open in the short run. Firm shuts down in short run if Price is less than $ c. Calculate the lowest price the firm would need to be able to sell their goods for in order to remain open in the long run. Firm exits in long run if Price is less than $arrow_forwarda. Calculate profit for each quantity. How much should the firm produce to maximize profut ? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at ) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?arrow_forward
- In a perfectly competitive market for widgets, the market price is R15. Cost information for a firm producing widgets in this market is given in the table below. Use this information to answer Question 1. Quantity Total Fixed Cost 10 Total Variable Cost 35 70 10 10 105 140 175 7 10 8 10 1. This firm should... A. break even. B. shut down. C. expand production. D. minimise losses by producing 1 widget. E. maximise profits by producing 8 widgets.arrow_forwardWhat are some characteristics of perfect competition? Is the Banana market a perfect competition? When you are buying bananas, what is your decision making process? Do you have any favorite brand of banana? How can companies in the market compete? Please name some other examples of perfect competition?arrow_forwardChoose the correct onearrow_forward
- Q. In a perfectly competitive industry, a. Firms earn a breakeven profit in the short-run, but can either make an economic profit or make a loss in the long-run b. None of the above c. Firms can choose whether to produce or shut-down in the short-run d. Firms always charge a price equal to the minimum of AVC in the short-run e. There are high “sunk costs” involved which act as a barrier to entry in this industryarrow_forwardConsider the following figure which shows the cost curves and demand curve for a firm in a perfectly competitive market. The shut-down price for this firm is: Select one: a. $10 b. $12 c. $25 d. Unknown based on the information provided.arrow_forwardRefer to the following table. If the market price of the good is $150, the firm will in the short run. MC AVC AC 0. 150 10 1,000 450 650 50 20 3,000 183 250 150 30 4,000 175 225 40 4,800 200 179 220 50 5,500 300 200 236 Select one: a. earn an economic profit b. suffer an economic loss, but still remain in business c. break even d. shut down its operationarrow_forward
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