Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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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
Micro 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_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_forwardShow 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_forward
- The 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_forwardIn 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_forward
- Choose the correct onearrow_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
- C. Table below shows some cost data for a perfectly competitive firm i. Is the firm operating in the short run or long run? How do you know?ii. At a market price of $32, what would be the output of the firm? Does this firm makeeconomic profit or loss at this price level? iii. If the market price is $32, would the firm shut down or keep operating? Why? iv. Based on your answer above, would firms enter or exit the market in the long run? What will happen to the market price?arrow_forwardIn perfect competition, why is a firm's marginal revenue curve also the demand curve for the firm's output? Clara sells handbags in a perfectly competitive market. The price of a handbag is $50. Draw Clara's marginal revenue curve. Label it. 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 0+ 0 Price (dollars per handbag) 6 8 Quantity (handbags per day) >>> Draw only the objects specified in the question. 2 4 10 oarrow_forward41 Output Total Total (Q) Price Revenue Cost 10 $12.00 $140 E of 20 $12.00 $220 30 $12.00 $380 40 $12.00 $620 The table above shows revenue and cost information at four different Output (Q) levels for a Perfectly Competitive firm in the short run. If the firm increases its Output from 30 to 40, Marginal Cost (MC) is. Select one: a. $12 b. $24 c. $160 d. $240arrow_forward
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