Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 9, Problem 10CQ
To determine
The profit earned by a firm in a
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Microeconomics: Private and Public Choice (MindTap Course List)
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- “In a perfectly competitive market, firms always operate at the lowest per-unit cost." Is the preceding statement true or false? Explain your answer.arrow_forwardA perfectly competitive firm will maximize its profit when marginal revenue is greater than marginal cost. True or False?arrow_forwardIf firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explainarrow_forward
- Firms always lose money in a long-run industry equilibrium, true or false?arrow_forwardHow would I do this?arrow_forwardThe connection between marginal revenue and price depends on a business's competitive environment. Why are marginal revenue and price the same for a business that is price taker in perfect competition ? Why is marginal revenue less than price for a business that is a price maker?arrow_forward
- Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would this be true of losses also? Why or why not?arrow_forward“The firm’s entire marginal cost curve is its short-run supply curve.” Is the preceding statement true or false? Why?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
- X4arrow_forwardAccording to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?arrow_forwardWhat is the formula for profit maximization by firm ? Why does this result in the marginal cost curve becoming the same as the supply curve for firms in perfect competition? what is the difference between the short run and long run ? Why does this difference matter in our discussion of firm behavior?arrow_forward
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