Suppose your firm operates in a perfectly competitive market and decides to double its output. How...

Question

Question

Suppose your firm operates in a perfectly competitive market and decides to double its output. How does this affect the firm

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer

Option c

the firm is a price taker so the price and the MR are the same and it does not change and the firm can not change it.

So the MR will not change but the MC may change as per the cost structure of the firm.

Add a comment

Answer 2

Similar Homework Help Questions

Suppose your firm operates in a perfectly competitive market and decides to double its output. How...

Suppose your firm operates in a perfectly competitive market and decides to double its output. How does this affect the firm's marginal profit? Please provide the answer& proper explanation in word format not in hand writing format A) Marginal revenue and marginal cost increase B) Marginal revenue increases but marginal cost remains the same C) Marginal cost may change but marginal revenue remains the same D) Marginal revenue and marginal cost decrease
a firm in perfectly competitive market sells all its products Q at constant price p (1)A...

a firm in perfectly competitive market sells all its products Q at constant price p (1)A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 +690 - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that...
Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens. Suppose the...

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens. Suppose the prevailing market price for this firm's product is $0.14 and the firm is currently producing 20 units of output. This competitive firm wishing to maximize its profit would Output per period TVC (S) TFC (S) 0 0 10 25 20 30 6 5 40 10 5 50 15 3. Increase output because marginal revenue is greater than marginal cost b. produce zero output because...

If a perfectly competitive firm's marginal revenue is greater than its marginal cost, the firm O...

If a perfectly competitive firm's marginal revenue is greater than its marginal cost, the firm O A. must be making an economic profit O B. will increase its output to increase economic profit. O c. will decrease its output to increase economic profit. OD. cannot increase its economic profit O E. will lower the price.
A price-taking firm in a perfectly competitive market faces a market price of $4. The firm's...

A price-taking firm in a perfectly competitive market faces a market price of $4. The firm's marginal cost function is MC(Q) = 2 + aQ, where "a" is a positive number. As "a" increases, the firm's profit-maximizing quantity increases, decreases, or does not change?
Assume that Firm A currently operates in a perfectly competitive market with positive profits. In the...

Assume that Firm A currently operates in a perfectly competitive market with positive profits. In the long run, there is inflow of new firms causing the total market supply to ___. Meanwhile, Firm A will ___ its output in response to decrease in market price. Increase; increase Increase; decrease Decrease; decrease Decrease; increase

the firm faces a constant price (P) of $60 A firm in a perfectly competitive market...

the firm faces a constant price (P) of $60 A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 + 69Q - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this...
A firm operates in a perfectly competitive market with a price of P = 50 for...

A firm operates in a perfectly competitive market with a price of P = 50 for the product. TVC = 0.5Q3 − 18Q2 + 170Q Q (output) TFC = 300. Write an equation expressing the firm’s total revenue (TR) as function of Q. Write an equation expressing the firm’s total cost (TC), as a function of Q. Write an equation expressing the firm’s profit (π), as a function of Q.Find the first-order condition for the firm’s profit-maximization decision. Find the...
Ronny's Pizza House operates in the perfectly competitive local pizza market. If the price of pizza...

Ronny's Pizza House operates in the perfectly competitive local pizza market. If the price of pizza cheese increases (ceteris paribus), what is the expected impact on Ronny's profit-maximizing output decision? Select one: a. Output increases to cover the higher input cost b. Output increases because the marginal cost curve shifts upward c. Output decreases because the marginal cost curve shifts upward d. Output decreases because the price of pizza must also increase

The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is...

The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is perfectly vertical. maybe downward or upward sloping, depending upon the type of product offered for sale. In the short run, the best policy for a perfectly competitive firm is to Question 17 options: shut down its operation if the price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its...

Suppose your firm operates in a perfectly competitive market and decides to double its output. How...

Homework Answers