Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 8, Problem 3SQP
To determine
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The graph shown displays the cost curves for a firm in a perfectly competitive market. If the market price is $100, which of the following statements is true?graph_q10
This firm will earn positive profits in the short run.
In the long run, the market supply curve will increase.
Profits for this firm will decrease in the long run.
I only
I and II
I and III
I, II and III
The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses.
Which of the following statements is true about the price of fertilizer? Check all that apply.
The price of fertilizer must be less than average total cost.
The price of fertilizer must be equal to average variable cost.
The price of fertilizer must be less than marginal cost.
Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply.
Average total cost will decrease.
The quantity supplied by each firm will decrease.
The total quantity supplied to the market will decrease.
Marginal cost will decrease.
The price of fertilizer will increase.
suppose the market equilibrium price of wheat is $2 per bushel in a perfectly competitive industry. Draw the industry supply and demand curves and the demand curve for a single wheat farmer. Explain why wheat farmer is a price taker.
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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- suppose the market equilibrium price of wheat is rs.2 per bushel in a perfectly competitive industry.draw the industry supply and demand curves and the demand curve for a single wheat farmer.explain why the wheat farmer is a price tracker.arrow_forwardQuestion 1.Suppose the market equilibrium price of wheat is Rs.2 per bushel in a perfectly competitive industry. Draw the industry supply and demand curves and the demand curve for a single wheat farmer. Explain why the wheat farmer is a price trackerarrow_forwardA perfectly competitive firm produces the level of output at which MR=MC on the rising portion of the firm’s marginal cost curve. At that output level, it has the following costs and revenues: TC = $830,000 VC = $525,000 TR = $428,000 Given that the firm produces the level of output at which MR=MC, calculate the amount of profit (loss) this firm earns. is it Profit=TR-TC?arrow_forward
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- A perfectly competitive firm is currently maximizing profits. The market for its product is in a long-run equilibrium. Market demand for the product decreases. Summarize what will happen in the market in the long run. Discuss the changes that will occur in the long run for the firm and explain why. You do not need to discuss why each cost changes, but do explain why the firm ends up where it does relative to where it was at the beginning and where it was in the short run.arrow_forwardthe short-run supply curve of a perfect competitive firm is the same as that portion of the marginal cost curve, over and above the minimum portion of the AVC. with graphic support carefully proof this .arrow_forwardWill, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive. The first chart shows how much each farmer produces at different price levels. The second chart shows each farmer's minimum average total cost (ATC), average variable cost (AVC), and marginal cost (MC). Based on this data (assuming these three are the only producers), answer the questions that follow. Short-run quantity supplied Price Will Jill Phil $2.00 4 2 0 $4.00 6 4 2 $6.00 9 5 4 $8.00 12 8 6 Firm a. What is the cause of the divergence in the short-run Minimum ATC and long-run supply curves? Minimum AVC Minimum MC $1.00 $2.00 Will Jill Phil $2.50 $5.00 $7.00 $2.50 $0.50 $1.00 $2.00 government regulation changes in the market differing individual cost structures b. Suppose that the market price dips to $2.25 in the short run before ultimately settling at $2.50 per bushel. Who exits immediately, and who exits in the long-run when costs are no longer fixed? Phil exits immediately, Jill…arrow_forward
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