Q: Perfectly competitive firm that makes economic loses in the short run must cease its operations. do…
A: Perfectly competitive firm is a price taker because there are many sellers in the market selling…
Q: 8. 4. A firm in a perfectly competitive market will operate in the short run as long as its price…
A: Variable cost is a cost varying in response to a change in output level. These costs are a function…
Q: Suppose that the agricultural sector is perfectly competitive. Also suppose that all current…
A: Here market equilibrium price is at $1.99 which is greater than ATC $1.50 per pound of roma…
Q: 4. A perfectly competitive industry in long run equilibrium. A decrease in the demand for its…
A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…
Q: rm
A: The short run supply curve In a perfectly competitive market is the curve of marginal cost being at…
Q: 1. Explain how the long run differs from the short run in pure competition. 2. The basic model of…
A: 1. In the short run, when plants and gear are fixed, the organizations in an absolutely competitive…
Q: der perfect competition, firms profit in the long run will be abnormal profits.
A: A firm's profit is maximized profits in a perfectly competitive market Where marginal revenue (MR)…
Q: The diagram below, shows the cost structure for a firm in perfect competition. Assume that the…
A: The market price in a perfect competition market is 12. At this price, MC intersects ATC. It…
Q: 1. Consider market adjustment from the short-run to the long-run under a perfectly competitive…
A: Since you posted multiple questions, we will provide you the answer of first question. If you want…
Q: 2b) If the price of the product in a perfectly competitive market increases what happens to the…
A: The 'available market,' or that of all the individuals in the area, is referred to as a market.…
Q: 4. The number of firms that can survive in a very competitive industry in the long run depends on a.…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: 1. Draw short-run firm and industry competitive equilibriums for a perfectly competitive…
A: A perfectly competitive market is where there are a lot of buyers and sellers. The industry’s…
Q: Pretzel stands in New York City are a perfectly competitive industry in long-runequilibrium. One…
A: Perfect Competition refers to the type of market where there are large numbers of buyers and sellers…
Q: Which of the following is true about the long run in a compe industry? There are more firms…
A: The perfectly competitive market is characterized by the presence of a large number of buyers and…
Q: 1.(a) Explain with the help of a graph how a perfectly competitive firm determines its profit-…
A: The perfectly competitive market would result in large number of buyers and sellers in the market.…
Q: a) How does imperfect competition differ from perfect competition? b) True or False and explain: If…
A: Ans. a In perfect competition there are large number of buyers and sellers and sellers are selling…
Q: 3. Explain why a perfectly competitive firm will shut down in the short run if price is lower than…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: 3. In perfect competition, the firm's profit maximizing point is Where MR MIC O Where MR = MC c. In…
A: Answer - We need to find - In a perfect competition , the firm's profit maximizing point We will…
Q: 2. Discuss the following statement: 'In the real world there is no industry which conforms precisely…
A: here we discuss the following statement as follow;
Q: 5. Questions and Problems 8 You read in a business magazine that computer firms are reaping high…
A: In the long run, many new firms enter the perfectly competituve industry as they are attracted by…
Q: A firm in a perfectly competitive industry currently faces a market price of $20 and is maximizing…
A: (Q) A firm in a perfectly competitive industry currently faces a market price of $20 and is…
Q: 25. Understand when firms in a perfectly competitive market will enter or exit an industry. Firms…
A: Perfectly competitive market: It is a market situation where there is a large number of buyers and…
Q: 29. In the long run, a profit maximizing firm will choose to exit a market when a. fixei costs…
A: In the short-run, a firm exits a market if it is not able to cover its variable costs, i.e., it…
Q: (a) A competitive firm’s short-run supply curve depends on two curves. Which two exact curves are we…
A: A competitive market refers to a market in which there are multiple producers. The producers compete…
Q: b. Consider a perfectly competitive firm in the following position: output 4000 units, market $1,…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: 1. Draw a graph representing a perfectly competitive firm earning an economic profit. (Make sure to…
A: Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: 10 In the long run a perfectly competitive industry will have all firms making profits O all firms…
A: A perfectly competitive industry is one in which a larger number of sellers are allowed to offer…
Q: Given a perfectly competitive firm, which of the following statements are true? Select one or more:…
A: Competitors selling similar products in perfect competition. In economic language, this is referred…
Q: 3. True or False? a. A firm will make a profit when the price it charges exceeds the average…
A: Answer: (a). False Explanation: A firm will make a profit when the price it charges exceeds the…
Q: Total Cost and Output, which describes Sergei's total costs for his perfectly competitive…
A: A perfectly competitive firm is a price taker as it accepts the market price as given.
Q: 6. For a perfectly competitive firm, which of the following statement is wrong? A. It enjoys 0…
A: Characteristics of a perfectly competitive market are- 1. Large Number of buyers and sellers -…
Q: 1. Suppose that the restaurant industry is perfectly competitive. Joe's Diner is always packed in…
A: In the short run, if firm manages to charge the price, atleast higher than average variable cost,…
Q: 2. Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price…
A: In an economy, oil is considered as a cruical resource because it can be used in various areas and…
Q: (Short-Run Loss) Suppose a firm decides to shut down in the short run. What is the resulting loss?
A: When the price level is charged below the average variable cost, the firm forced to shut down. At…
Q: 2) Does a competitive firm’s price equal its marginal cost in the short run, in the long run, or…
A: Long run: - it is the time period in which all factors of production become variable in other words…
Q: 4. The market for fertilizer is perfectly competitive. Firms in the market are producing output but…
A: The markets are considered to be of utmost importance for the proper functioning of the economies.…
Q: Assume that apples are produced in a perfectly competitive market. Grande’s Orchard is a typical…
A: When market demand increases, the value of the nice rises, and therefore the market quantity…
Q: What is the shutdown condition? a.A condition stating when a firm should cease to operate and…
A: The shut-down condition is applicable for short run, where a firm stops production if its revenue is…
Q: 2. Bob’s lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27 each.…
A: In short-run, fixed costs are of no relevance or importance in making decision related to shut-down…
Q: Explain the three possible profit maximizing positions of perfectly competitive firms in the…
A: Profit maximization is that the method by that a corporation determines the evaluation, input, and…
Q: When should a firm shut down? In other words, what is the shut down point for a firm in perfect…
A: There are different types of costs that a firm encounters while making production decisions. These…
Q: Firm A operates in perfect competition, and the price the firm faces is greater than its average…
A: Since you asked multiple questions, we will solve first question for you. In case you want any other…
Q: 2) Short Answer Using the following production and cost information for a firm in a perfectly…
A: Firms in perfect competition are price takers because there are many firms producing identical…
Q: 20) What will a firm in a perfectly competitive industry do in the short-run if the price of its…
A: Short-run: - it is a short time period in which some factors of production are variable and some are…
Q: Show what happens in the short run on both graphs when a new medical study shows soybeans to be…
A: In a perfect competition market, individual firms supply their goods at prices that are determined…
Q: 2 b. Explain the situation when the firm under perfect competition continues production in the short…
A: Under the perfect competition, firms are price takers. The price of goods and services determined by…
7. Explain the situation when the firm under
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- 2 b. Explain the situation when the firm under perfect competition continues production in the short run even if the firm incurs abnormal loss.4. Bob's ice-cream house, a perfectly competitive firm, is suffering a loss, but the price is still above minimum average variable cost. Then in the short run this firm should and in the long run, if there is no change in economic conditions, this firm should a) shut down; exit the industry b) shut down; expand produce where MR = MC; exit the industry produce where MR = MC; expandQuestion 7 When should a firm shut down? In other words, what is the shut down point for a firm in perfect competition?
- QUESTION 10 Jack sells water bottles. Assume the market for water bottles is perfectly competitive. Jack sells his water bottles at the market price of $9.00. At the profit-maximising output level of 51 water bottles, Jack's average total cost is $4.40 per water bottle. The minimum average variable cost is $3.90 per water bottle. Answer the following questions: a. Jack's economic profit or loss is decimal places (ie: to the nearest cent). (use a negative value if a loss). Answer in dollars, rounded to two b. State whether the following statement is true or false: "At the profit-maximising quantity, Jack is making an economic profit of $4.60 per water bottle." Type T for true, or F for false c. State whether the following statement is true or false: "Jack should shut down if the market price is $3.85 per water bottle." Type T for true, or F for falseC. Table below shows some cost data for a perfectly competitive firm i. Is the firm operating in the short run or long run? How do you know?ii. At a market price of $32, what would be the output of the firm? Does this firm makeeconomic profit or loss at this price level? iii. If the market price is $32, would the firm shut down or keep operating? Why? iv. Based on your answer above, would firms enter or exit the market in the long run? What will happen to the market price?Suppose the current market price for bar stools is $25 each. My friend René's profit-maximizing output is to produce 10 bar stools. If he produces 10 bar stools, his average variable cost will be $30 per unit and his average total cost will be $40 per unit. In the short run, what is René's profit?Hint: Should René keep operating or shut down? a.$150. b.$0. c.-$100. d.-$150.
- 24) What are shut-down losses (if the firm shuts down)?a. Calculate profit for each quantity. How much should the firm produce to maximize profut ? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at ) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?1) Under what conditions will a firm shut down temporarily? Explain.
- 7. A perfectly competitive firm can sell its product for a price of 10. The firm's (short run) total cost function is: C(q) = 5 +3q+q². On a well-labeled graph, draw a figure illustrating the firm's profit at different levels of output. Show the profit-maximizing level of output on the graph. a. b. c. Write an expression for the firm's profit maximization problem. Solve the firm's profit maximization problem to determine the optimal level of output. Be sure to check whether or not the firm should shut down. d. Suppose instead that the price of the output falls to 5. Should the firm shut down? Explain. e. Suppose that instead of the cost function given above, the cost function is C(q) = 5 + 3q. The price of the good is 10. What happens if you try to maximize profit in this situation? Explain.a.What is the profit maximizing level of output for the firm? b.What is the economic profit earned or loss incurred by the firm? c. Based on your answers of (a) & (b) determine what should be the firms decision regarding exit in the long run. Explain your answer.Galaxy is a firm in perfectly competitive market. Galaxy currently produces and sells 400 units of toys. Its total revenue is $4,000; the marginal cost of producing the last toy is $12; and the average total cost of producing the the last toy is $8. Is the Galaxy maximizing its profit, or should it increase or decrease output in order to increase its profit? Explain to get full credit.
