Question #2: Using the following graph to answer the following questions: 100 MC 80 ATC 60 AVC 40 20 MR 1,000 2,000 3,000 4,000 5,000 Notes: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. a. By looking of this graph, what can you say about the market power of this firm? Is it a perfect competition or a monopoly? Explain. b. To maximize the profit, how many units should the firm produce? At what price? c. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain. Revenues and costs (dollars)

Question #2: Using the following graph to answer the following questions: 100 MC 80 ATC 60 AVC 40 20 MR 1,000 2,000 3,000 4,000 5,000 Notes: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. a. By looking of this graph, what can you say about the market power of this firm? Is it a perfect competition or a monopoly? Explain. b. To maximize the profit, how many units should the firm produce? At what price? c. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain. Revenues and costs (dollars)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 12P

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Using the attached graph to answer the following questions: Notes: MC is marginal cost, MR is marginal revenue, ATC is the average total cost, AVC is the average variable cost, and D is the demand curve. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? Will you operate this firm in the short run? Long run? Briefly explain.
QUESTION 4 The graph below summarizes the demand and costs for a firm that operates in a perfectly competitive market. Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below. 2$ 48 44 - MC АТС 40 - 36 - 32- D'=MR 28 - 24 - AVC 20 - 16 - 12 - AFC 8. 4 0- 1 3 5 6 8. 9 10 11 Quantity a. What level of output should this firm produce in the short run? units. b. What price should this firm charge in the short run?P = $ c. What is the firm's total cost at this level of output? TC= d. What is the firm's total variable cost at this level of output? TVC = e. What is the firm's fixed cost at this level of output? FC = f. What is the firm's profit if it produces this level of output? Profits = $ g. What is the firm's profit if it shuts down? $ さ 8 e
Using the attached graph to answer the following questions: Notes: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. By looking of this graph, what can you say about the market power of this firm? Is it a perfect competition or a monopoly? Explain. To maximize the profit, how many units should the firm produce? At what price? Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? Will you operate this firm in the short run? Long run? Briefly explain. TR=360,000 TC=270,000 TP=90,000 TFC=90,000
x Question Completion Status The following graph shows the costs and revenues of a typical firm operating in a certain market condition. What type of market this firm is operating under? Is it a perfect competition, or monopoly, or monopolistic competition market? How can you tell? Explain. MC ATC D AVC Save A
How do I know this graph shows a firm that is perfectly competitive? Which curve tells me it is?
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3. Profit maximization using total cost and total revenue curves Suppose Cho runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $25 per frying pan. The following graph shows Cho's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Cho produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 50 25 -25 1 2 3 4 7 8 QUANTITY (Frying pans) Calculate Cho's marginal revenue and marginal cost for the first seven frying pans she produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. TOTAL COST AND REVENUE (Dollars)
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