Suppose that a firm in a perfectly competitive market has sunk fixed cost and avoidable fixed cost. If the market price is above the minimum point on the short-run average variable cost curve, the firm will necessarily produce a positive quantity. True or False?
False
Explanation: In this situation, the firm may or may not produce. It will earn a profit when the price is higher than the average total cost and the quantity would be necessarily positive then.
Suppose that a firm in a perfectly competitive market has sunk fixed cost and avoidable fixed...
Which of the following statements is true about a competitive market in the long run? 1. It is possible that existing firms make negative profit. II. It is possible that existing firms make positive profit. Only II. is true. Only I. is true. O Both are true. Both are false. Question 9 (1 point) Suppose that a firm in a perfectly competitive market has sunk fixed cost and If the market price is above the minimum point on the short-run...
Could someone please help me with these questions! Thank in advance! Question 8 (1 point) Which of the following statements is true for a perfectly competitive market in the short run? I. It is possible that existing firms make positive profit. II. It is possible that existing firms make negative profit. Both are false. Only II. is true. Only I. is true. Both are true. Question 9 (1 point) Suppose that a firm in a perfectly competitive market has sunk...
In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The market demand is Q(p)=220-p a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it. b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market. c. What is the market supply curve? What are the...
A firm in a perfectly competitive market has a short-run total cost curve of ST C(Q) = 20 + 10Q + Q2. The market price is $10. a) What is the profit-maximizing quantity? b) What are the maximum profits? c) Find the short-run supply curve if all fixed costs are sunk. d) Find the short-run supply curve if all fixed costs are non-sunk. e) Suppose there are 100 identical firms in this market. What is the market supply curve if...
Suppose a perfectly Competitive firms minimum average variable cost is $1 when it produces 50. If the price is $2 and the firm's marginal cost is $2 the firm should Continue to produce, but produce less than 50 Continue to operate, but produce more than 50 Shut down Continue to produce 50 To maximize economic profit of perfectly competitive firm: will sell its goods below the market price all of the above will sell its goods above the market price...
cardboard boxes are produced in a perfectly competitive market. each identical firm has a short run total cost curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in thousands of boxes per week. calculate the output for the price below which a firm in the market will not produce any output in the short run. ( i.e., the output for the shut down price) a 2^1/2 b. 2 c. 1/2 d. 1/square root of 2 2)...
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 the market for watermelons is perfectly competitive and that there are 100 identical firms currently in the market. Each firm as a short run total cost curve of STC=2Q^2+150, with $150 of the fixed costs sunk. calculate the shutdown price for a typical firm.
The market for candy is perfectly competitive, and the current market price of candy is $10. A particular firm has a short-run marginal cost of production of MC = 0.2q, where q is the number of bicycles produced by the firm. a. If it is optimal for the firm to produce a positive amount of output in the short run, how much should it produce? b. Suppose that the firm has fixed costs of $30, and its average variable cost...
1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by C(q) = 5+2q+9. The market price is $10. (a) What is the profit-maximizing output level for this firm? (b) What is the firm's total revenue and profits at the profit-maximizing output? (c) What is the minimum price at which the firm will produce a positive level of output in the short run?