Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 6MC
To determine
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For a perfectly competitive firm,
a. demand is perfectly elastic.
b. producers must lower the price of its product in order to sell additional units of the product.
c. price equals marginal revenue only for the first unit of the good produced and sold.
d. demand is perfectly inelastic.
Procter & Gamble Co. is a major soap producer. All of the following, except one, would shift its supply curve of liquid soap to left . Which is the exception?a. an increase in the price of bar soapb. an increase in the price of a key ingredient of liquid soapc. environmental regulations force Procter & Gamble to use a more costly technology to produce liquid soapd. a decrease in the price of liquid soape. an increase in the wage rate for factory workers who produce liquid soap
In a competitive market, are market supply curves
typically more elastic in the short run or in the long
run? Explain within 40 words.
Chapter 9 Solutions
Managerial Economics: A Problem Solving Approach
Knowledge Booster
Similar questions
- A firm facing a perfectly price elastic demand curve, ceteris paribusA. can sell all it produces only by lowering its price below the market price.B. can raise its price and not lose all its customers.C. will sell the same amount regardless if it raises or lowers the price it charges.D. will have zero quantity demanded if it raises its price above the market pricearrow_forwardexplain your answers in detail and use graphs whenever appropriate: The market for rental cars is very competitive. How would the following developments affect the quantity of car rentals that a typical rental car company wants to supply in the short run? a. With the easing of fears about Covid 19, people are more excited to travel than before. b. Local governments reduce the yearly fee that rental car companies have to pay for their facilities. Note, these fees do not vary with how many cars the company rents. c. Rental car companies have to pay higher wages for their workers. Suppose that initially the market for rental cars is in long-run equilibrium. a. What does the fall in the yearly fee rental car companies have to pay for their facilities do to the profits of a typical rental car company in the short run? b. What will happen to the equilibrium price and quantity of rental cars in the long run? Why? What will happen to the profits of a typical rental car company in the long run?arrow_forwardA firm facing a horizontal demand curvea. cannot affect the price it receives for its output.b. always produces at an output at which P = MR.c. faces perfectly elastic demand for its product.d. All of the above are correct.arrow_forward
- An exclusive yoghurt manufacture sellers 4000 gallons per month at a price of GHS 40 each. When the price is reduced to GHS 30 sales increase to 6000 gallons per month. 1.calculate the price elasticity of demand for the yoghurt over this Price range. 2.is the demand elastic or inelastic. 3.calculate the change in revenue due to the change in pricearrow_forwardSnooki, a new marketing intern, was a little scatterbrained during the first meeting with her manager, when she made four statements about pricing. Which one of her four statements about pricing was correct? a. A product with an elastic demand is likely to face little competition. b. An EDLP retailer offers many price promotions. c. A product with an elasticity of demand of -0.7 will enjoy increases in revenue when prices are cut. d. Cost-plus pricing is not the perfect pricing strategy because the pricing method ignores customers’ willingness to pay and competitors’ pricing strategy.arrow_forwardWhat is a price taker? A price taker is A. a firm with a perfectly inelastic demand curve. B. a firm that has the ability to charge a price greater than marginal cost. C. a firm that is unable to affect the market price. D. a firm that does not seek to maximize profits. E. a firm with a downward-sloping demand curve. When are firms likely to be price takers? A firm is likely to be a price taker when A. it has market power. B. firms in the industry collude. C. it sells a differentiated product. D. it represents a small fraction of the total market. E. barriers to entry are substantial.arrow_forward
- Optimal Price. Last week, Wally's Burgers, Inc. reduced the average price on the 1/2-pound Papa burger by 1%. In response, sales jumped by 2%.A. Calculate the point price elasticity of demand for Papa burgers.B. Calculate the optimal price for Papa burgers if marginal cost is $1 per unit.arrow_forwardPlease help ASAP correctarrow_forwardPlease dear type the answer.arrow_forward
- If a firm sells 50 units at price of 5 and 70 units at price 7, which of the following is false? A. There is a positive relationship between price and quantity sold. B. Its marginal revenue is equal to 12. C. Its price elasticity of supply is equal to 1. D. All of the above are true. E. All of the above are false.arrow_forwardEdward Scahill produces table lamps in the perfectly competitive desk lamp market. The equilibrium price of lamps is $50. a. Fill in the blanks in the table for total revenue and marginal revenue, as represented by (i and ii). (Enter your responses as integers.) (1) Total revenue is $. (ii) Marginal revenue is $. b. How many table lamps will Edward produce to maximize profit? lamps. c. If next week the equilibrium price of desk lamps drops to $30, should Edward shut down? O A. Yes because he is not covering his fixed costs. OB. Yes because price is less than ATC. OC. No because price is greater than minimum AVC. D. No because he is covering his fixed costs and some of his AVC. Output per Total Costs Marginal week Cost 0 1 2 3 4 5 6 7 8 9 $120 150 170 185 195 215 260 310 385 495 $30 20 15 10 20 45 50 75 110 Total Marginal Revenue Revenue SO 50 100 (1) 200 250 300 350 400 450 $50 50 50 (if) 50 50 50 50 50arrow_forwardA firm in a perfectly competitive market a. can increase its supply to lower the market price. b. can raise the price of its product and sell more output. C. can decrease its supply to increase the market price. d. has to accept the market price for its product. e. has to lower the price of its product to sell more output.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning