Economics For Today
10th Edition
ISBN: 9781337670654
Author: Tucker
Publisher: Cengage
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Question
Chapter 8, Problem 6SQP
To determine
Firm’s output and profit.
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Explain why there is no profit-maximizing level of output for a firm with increasing returns to scale. What does this imply in reality?
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If firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explain
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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- According to the accompanying table, what quantity of output should the firm produce? Explain your answer.arrow_forwardWhat type of economic profit can most firms expect to make in the long run? Explain your answer.arrow_forwardUnder what conditions would a firm decide to shut down in the short run but remain invested in the market in the long run? Explain your reasoning.arrow_forward
- Does L&P earn positive economic profit if it produces the allocatively efficient quantity? Explain.arrow_forwardYou witnessed new firms entering a competitive market. What can you infer for the existing firms in that market?arrow_forwardJust a student stuck on this Economic question for awhile. Question in image. I appreciate you helping me learn :)arrow_forward
- Explain why a firm carries on production in short run even if it makes negative profit. Use well labeled diagrams to support your explanation.arrow_forwardIf the firms in a competitive industry incur an economic loss, what happens to supply, price, output, and economic profit in the long run? also please provide a scenario. thank you.arrow_forwardyou've been learning about what makes a market perfectly competitive, how a firm in a perfectly competitive market makes profit-maximizing decisions, and how a perfectly competitive market moves towards equilibirium. But how applicable is this to real life? For this discussion, try to think of a market (for a product or service) that is perfectly competitive or very close to it. What characteristics of the market make it like perfect competition? Are there factors that keep it from being perfectly competitive? If so, what are they? How close do you think the firms in this market are to perfectly competitive firms in choosing equilibrium price and quantity?arrow_forward
- "the economic model of perfectly competitive market is very unrealistic because it predicts that firms in a perfectly competitive market earn zero profits in the long run. However, in reality, no firm would stay in business if it earned no profits." agree or disagree? explain.arrow_forwardFor the following, decide whether you agree or dis-agree and explain your answer: a. A firm earning positive profits in the short run always has an incentive to increase its scale of operation in the long run. b. A firm suffering losses in the short run will continue to operate as long as total revenue at least covers fixed cost.arrow_forwardThe graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5arrow_forward
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