Homework Answers
Since the profit maximising condition of the perfectly competitive firm is
P=MR=MC
The profit-maximizing level of output for a perfectly competitive firm occurs where: .marginal revenue equals marginal cost.
As it can be seen in the figure that at the price P4, MC and Price are equal and at this quantity ATC is less than the price. Hence there will be positive economic profit at price P4.
Hence option first is the correct answer.
Add Answer to:
MC Price and Cost ATC 11 11 11 ONI In the above figure, if price is...
19) The above figure shows the cost curves for a competitive firm. If the price is...
19) The above figure shows the cost curves for a competitive
firm. If the price is _______, then this firm will _______, and it
______ shut down in the short run.
A) less than $10; incur economic loss; will not.
B) greater than $10; earn economic profit; will not.
C) less than $10; incur economic loss; may or may not.
D) B and C only
E) A and B only
$1q] MC 15 AC 11 10 AVC 40
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC...
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC ا أ ا 1 2 3 4 5 6 7 8 Quantity Suppose the current price is $6. What will happen in the long run? O Nothing will happen in the long run. The firm is earning zero economic profit. O Since the firm is earning a positive economic profit, there is an incentive for new firms to enter the industry in the long...
Suppose a firm operating in a competitive market has the following cost curves: Price MC ATC...
Suppose a firm operating in a competitive market has the following cost curves: Price MC ATC P7 プ , AVC P3 P2 . Q1 02 03 04 05 gaantity Refer to Figure 14-5. In the short run, if the market price is P2, indavidual firms in a competitive industry will eam positive profits. zero profits. losses but will remain in business. losses and will shut down e
33. In the figure above, a firm's total revenue and total cost curves are shown. Which...
33. In the figure above, a firm's total revenue and total cost curves are shown. Which one of the following statements is FALSE? a. Total profit is the vertical distance by which the total revenue curve exceeds the total cost curve. b. At output Q1, the firm makes zero economic profit. c. At an output above Q3, the firm suffers an economic loss. d. At output Q2, the firm suffers an economic loss. Price and cost (dollars per unit) 01...
The above figure shows the cost curves for a competitive firm. If the price is _______,...
The above figure shows the cost curves for a competitive firm.
If the price is
_______, then this firm will _______, and it ______ shut down in
the short run.
A) less than $10; incur economic loss; will not.
B) greater than $10; earn economic profit; will not.
C) less than $10; incur economic loss; may or may not.
D) B and C only
E) A and B only
I got answer of D and E from different experts. I...
Figure 1 7. Referring to Figure 1, if the market price was Ps, the profit- maximizing...
Figure 1 7. Referring to Figure 1, if the market price was Ps, the profit- maximizing (or loss-minimizing) firm will: A. shut down in the short run and incur a loss equal to area P PsAK B. produce output qs, resulting in total revenue equal to area 0PsEqs. total cost equal to area OPsEqs and zero economic profits produce output q, resulting in total revenue equal to area 0PsBq total cost equal to area OP:Fqs and economic profits equal to...
Question 8 (Mandatory) (5 points) MC ATC AVC 13 MR Price 00 6 4 0 10...
Question 8 (Mandatory) (5 points) MC ATC AVC 13 MR Price 00 6 4 0 10 15 28 31 20 Quantity Reference: Ref 24-3 In the figure above, to maximize profits or minimize losses the firm should produce units. OA) 15 B) 20 C) 28 OD 10 Question 11 (Mandatory) (5 points) MC ATC AVC 13- MR Price 9 8 A 0 4 10 15 28 20 Quantity Reference: Ref 24-3 In the figure above, the firm A) could make...
Use the following to answer questions 11-13: Figure: Interpreting Short-Run Cost Curves ATC 1.2 AVC 1.0...
Use the following to answer questions 11-13: Figure: Interpreting Short-Run Cost Curves ATC 1.2 AVC 1.0 MC 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1.0 1.2 Output 11. (Figure: Interpreting Short-Run Cost Curves) Using information from the figure equals $0.40, the firm should: A) stay open because it is making an economic profit B) stay open in the short run because it is operating at an economic loss C) stay open because it is making a normal profit....
QUESTION 21 Figure 14-3 Suppose a firm operating in a competitive market has the following cost...
QUESTION 21 Figure 14-3 Suppose a firm operating in a competitive market has the following cost curves: AVC " a"* PRICE " a QQ: QQQ QUANTITY Refer to Figure 14-3. Firms would be encouraged to enter this market for all prices that exceed a. P1 b.P4 c. P2 d. P3- OOOO QUESTION 20 Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE ----- 1 4 5 2 3 QUANTITY Refer to Figure 14-1....
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC...
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC and P>ATC. This firm A) is making positive economic profits B) is making zero economic profits C) is making negative economic profits but should continue to operate D) is making negative economic profits and should shut down.
19) The above figure shows the cost curves for a competitive
firm. If the price is _______, then this firm will _______, and it
______ shut down in the short run.
A) less than $10; incur economic loss; will not.
B) greater than $10; earn economic profit; will not.
C) less than $10; incur economic loss; may or may not.
D) B and C only
E) A and B only
$1q] MC 15 AC 11 10 AVC 40
1 Price The figure below captures a firm in a perfectly competitive industry. MC ATC AVC ا أ ا 1 2 3 4 5 6 7 8 Quantity Suppose the current price is $6. What will happen in the long run? O Nothing will happen in the long run. The firm is earning zero economic profit. O Since the firm is earning a positive economic profit, there is an incentive for new firms to enter the industry in the long...
Suppose a firm operating in a competitive market has the following cost curves: Price MC ATC P7 プ , AVC P3 P2 . Q1 02 03 04 05 gaantity Refer to Figure 14-5. In the short run, if the market price is P2, indavidual firms in a competitive industry will eam positive profits. zero profits. losses but will remain in business. losses and will shut down e
33. In the figure above, a firm's total revenue and total cost curves are shown. Which one of the following statements is FALSE? a. Total profit is the vertical distance by which the total revenue curve exceeds the total cost curve. b. At output Q1, the firm makes zero economic profit. c. At an output above Q3, the firm suffers an economic loss. d. At output Q2, the firm suffers an economic loss. Price and cost (dollars per unit) 01...
The above figure shows the cost curves for a competitive firm.
If the price is
_______, then this firm will _______, and it ______ shut down in
the short run.
A) less than $10; incur economic loss; will not.
B) greater than $10; earn economic profit; will not.
C) less than $10; incur economic loss; may or may not.
D) B and C only
E) A and B only
I got answer of D and E from different experts. I...
Figure 1 7. Referring to Figure 1, if the market price was Ps, the profit- maximizing (or loss-minimizing) firm will: A. shut down in the short run and incur a loss equal to area P PsAK B. produce output qs, resulting in total revenue equal to area 0PsEqs. total cost equal to area OPsEqs and zero economic profits produce output q, resulting in total revenue equal to area 0PsBq total cost equal to area OP:Fqs and economic profits equal to...
Question 8 (Mandatory) (5 points) MC ATC AVC 13 MR Price 00 6 4 0 10 15 28 31 20 Quantity Reference: Ref 24-3 In the figure above, to maximize profits or minimize losses the firm should produce units. OA) 15 B) 20 C) 28 OD 10 Question 11 (Mandatory) (5 points) MC ATC AVC 13- MR Price 9 8 A 0 4 10 15 28 20 Quantity Reference: Ref 24-3 In the figure above, the firm A) could make...
Use the following to answer questions 11-13: Figure: Interpreting Short-Run Cost Curves ATC 1.2 AVC 1.0 MC 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1.0 1.2 Output 11. (Figure: Interpreting Short-Run Cost Curves) Using information from the figure equals $0.40, the firm should: A) stay open because it is making an economic profit B) stay open in the short run because it is operating at an economic loss C) stay open because it is making a normal profit....
QUESTION 21 Figure 14-3 Suppose a firm operating in a competitive market has the following cost curves: AVC " a"* PRICE " a QQ: QQQ QUANTITY Refer to Figure 14-3. Firms would be encouraged to enter this market for all prices that exceed a. P1 b.P4 c. P2 d. P3- OOOO QUESTION 20 Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE ----- 1 4 5 2 3 QUANTITY Refer to Figure 14-1....
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC and P>ATC. This firm A) is making positive economic profits B) is making zero economic profits C) is making negative economic profits but should continue to operate D) is making negative economic profits and should shut down.
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