Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134643175
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 3E
(a)
To determine
The short-run supply curve.
(b)
To determine
Identify the industry supply curve if 100 identical firms are in the market.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
QUESTION 10
Tony sells pet collars at the Sunday markets. Assume the market for pet collars is perfectly competitive. Tony's profit maximising output
is 34 collars. At this profit-maximising output level, Tony's average total cost is $4.20 per collar. His minimum average variable cost is
$3.10 per collar. The market price is $5.40 per collar.
Answer the following questions:
(use a negative value if a loss). Answer in dollars, rounded to two
a. Tony's economic profit or loss is
decimal places (ie: to the nearest cent).
b. State whether the following statement is true or false: "Tony's marginal cost is $4.20 per collar." Type T for true, or F for false
c. At the current market price, should Tony shut down? Type Y for Yes, or N for No
Soft drink industry has been historically profitable why?
compare the economies of the concentrate business to the economics of the bottling business. Why do you think the profitability is so different between these businesses?
Slide 2 Questions:
a. What is the total revenue of the firm at the optimum level of output?
b. What is the total cost at the optimum level of output?
c. What is the profit of the firm at the optimum (profit-maximizing) level of output?
d. What is the average cost of each unit sold at the optimum level of output?
Is the firm at its log-run equilibrium? If yes/no, why?
Chapter 8 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
Knowledge Booster
Similar questions
- The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on this figure, which of the following statements are correct? 8,000 Price, Marginal cost ($) 0 E Quantity of cars, Q At A, the firm makes positive profits. The firm makes the same profit at B and D. O Profit margin is the same at B and D. O The slope of the isoprofit is zero at D. MC Isoprofit A Isoprofit B AC 100arrow_forwardAnswer the following, providing a graphical illustration along with your answer where necessary:a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-runabnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’spayoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?arrow_forwardAnswer the following, providing a graphical illustration along with your answer where necessary:a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-runabnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’spayoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma? QUESTION A AND B ALREADY SOLVED, FROM C ONLY !!!arrow_forward
- Shazam, a maker of magic wands, is selling in a purely competitive market. Its output is 500 wands, which sell for $10 each. At this level of output, the marginal cost is $10 and the average variable cost is $12. Should the firm increase output, decrease output, or not produce? Explain why?arrow_forwardConsider a kettle firm A in a perfectly competitive market. Table 1 shows the quantity produced per hour (Q) and the total cost (TC) in the short run. Quantity 0 12345C70 2 6 8 Total cost 17 30 40 55 75 100 130 165 210 Fixed cost 17 17 17 17 17 17 17 17arrow_forwardYou read in a business magazine that computer firms are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time to each of the following? (a) Computer prices; (b) The profits of computer firms; (c) The number of computers on the market; (d) The number of computer firms.arrow_forward
- 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_forwardYour business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. If the goal of your business is to maximize profit, how much will it produce, and what price will it charge? -The business will exit the market because it is unable to cover its average costs. -The business will produce 40 units, and charge a price of $5. -The business will produce 30 units, and charge a price of $3. -The business will produce 30 units, and charge a price of $6.arrow_forwardIf a firm's total revenue is $100, it's total cost is $130, and its total fixed cost is $40. Should the firm stay in business? Explain. How does a firm in perfect competition determine its outputs to produce? Why will the firm not produce this level of output? Explain.arrow_forward
- a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’s payoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?arrow_forwardThe Economy Tomorrow Using the following graph as a reference, what will be the effect of a successful advertising campaign on the firm's cost, demand, and marginal revenue curves? MC ATC Demand Quantity (units per period) Marginal cost will (Click to select) Average total cost will (Click to select) Demand will (Click to select) Marginal revenue will (Click to select) Price or Cost (dollars per unit)arrow_forwardThe curves show the marginal cost (MC), average variable cost (AVC), marginal revenue (MR), and average total cost (ATC) curves for a firm that sells mid-range cars in a competitive market. Use the area tool to draw the area representing the firm's profit or loss, if the firm produces 6,000 cars. Your answer should be a rectangle drawn with four corners.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education