ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 8, Problem 9P
To determine
The reasons for firms choosing to operate in a
Why firms choose to operate in perfect competition even though they earn no economic profits in the long run.
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(Table: Costs for Alina's Apple Pies) Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $38, what profit (or loss) will this firm earn?
a profit of $200
a loss of $30 T
a loss of $200
a profit of $80 This is what I think the answeris
Question 3 (Equilibrium)
200
Suppose the market demand is Qp
and the market supply is Qs = 2NP, where N is the number of
P
firms in the market. Suppose N = 25.
(a) What are the short-run equilibrium price and the equilibrium quantity?
(b) What is the output level for cach firm?
(c) What is the profit for each firm?
(d) Repeat part (a) through (c) for N = 400.
(Table: Costs for Alina's Apple Pies) Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $38, what profit (or loss) will this firm earn?Possible solutions
a profit of $80
a loss of $30
a profit of $200
Chapter 8 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- 9. The chicken farming industry in Northern New York is extremely profitable and I would really like to enter that market. Unfortunately, suitable land has become very difficult to find as public health policies prevent raising chickens near any flowing water supply. I cannot find any land for my new chicken farm. What is the economic term for this?arrow_forward(Figure: Big Tree Organic Farms in the Short Run) Use Figure: Big Tree Organic Farms in the Short Run. Big Tree Organic is a perfectly competitive organic farm in Turlock, California. If the market price is G, the farm's total cost of producing its most profitable level of output is: Price G F EN S 0 OBS. DK. OFKD. OESB. H L MC ATC AVC B D Quantity (per period) MRarrow_forward(Table: Total Cost and Output for All-Natural Frozen Yogurt) Use Table: Total Cost and Output for All- Natural Frozen Yogurt, which describes Sasha's total costs for his perfectly competitive all-natural frozen yogurt firm. İf the market price of a tub of frozen yogurt is $20, how many tubs of frozen yogurt will Sasha produce in the short run? Table: Total Cost and Output for All-Natural Frozen Yogurt Output Total Cost $10 60 80 3 110 4 170 5 245 O a) 1 b) o d) 2arrow_forward
- (Short-Run Profit Maximization) A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's products is $150. Output FC VC TC TR Proft/Loss 0 $100 $0 _______ ________ ____________ 1 $100 $100 _______ ________ ____________ 2 $100 $180 _______ ________ ____________ 3 $100 $300 ________ ________ ____________ 4 $100 $440 _________ _________ ____________ 5 $100 $600 _________ _________ ____________ 6 $100 $780 _________ _________ ____________ a. Complete the table. b. At what output rate does the firm maximize profit or minimize loss? c. What is the firm's marginal revenue at each positive level of output? Its average revenue? d. What can you say about the relationship between marginal…arrow_forward(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm. The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit. If the market price is $3, the firm will produce units of output per day. Price (per unit) $3.00 2.00 1.90 1.00 0 100 MC 250 300 ATC d 400 Output (per pday)arrow_forward11. What must an entrepreneur do to earn a profit? How do the actions of firms earning profits influence the value of resources? What happens to the value of resources when losses are present? If a firm making losses goes out of business, is this bad? Why or why not?arrow_forward
- Economics Suppose you are the production manager of a small perfectly competitive firm making a single product. (i) Explain whether each of the following factors does or does not affect the profit-maximizing level of output your perfectly competitive firm makes. (ii) Is your answer different in the short run compared to the long run? Explain why/how. a. Rent for the firm’s space increases. (graph required) b. Health insurance premiums paid by the employer increase (graph required).arrow_forwardHW#4 (Costs of Production, Competitive Markets) Attempts: Keep the Highest: /6 20. Problems and Applications Q3 Consider total cost and total revenue, given in the fllowing table: In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Total Cost Quantity (Dollars) Marginal Cost Marginal Revenue (Dollars) Total Revenue Profit (Dollars) (Dollars) (Dollars) 12 3 11 18 4 15 24 20 30 26 36 35 42 In order to maximize profit, how many units should the firm produce? Check all that apply. 4 6. In the previous table, enter marginal revenue and marginal cost for each quantity.arrow_forward4 (Kindly see attached screenshot) The firm depicted in Figure 6-10 currently is producing 200 units of output per day. If it decides to increase its output level to 375 units, then it will a. adjust from point F to point G in the short run b. be unable to adjust to point G in the short run because some inputs are fixed c. be unable to adjust to point G in the long run because some are fixed d. be unable to adjust to point H in the short run because some inputs are fixed e. adjust from point F to point H in the long run Please be as detailed as possible in your answer.arrow_forward
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