Homework Answers
Answer
Option D
the increase in wages increases the marginal cost of individual
firms which decreases the supply of individual firms, as well as
the industry as the new firms in the short run, can not
enter.
======
Answer
Option D
Positive economic profit attracts new entrants to the industry as
the investors do not have the best alternative to invest because
the positive economic profit means the opportunity cost of all
other alternative is less than this one.
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Concept Question 3.25 In a perfectly competitive industry in the short run, if wages increase, which...
Assume that the average wage of workers increases in a perfectly competitive industry. This change will...
Assume that the average wage of workers increases in a perfectly competitive industry. This change will result in a(n): Multiple Choice O increase in marginal costs for firms in the industry and a rightward shift in the industry supply curve. O decrease in marginal costs for firms in the industry and a leftward shift in the industry supply curve. O decrease in marginal costs for firms in the industry and a rightward shift in the industry supply curve. increase in...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice...
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice O is equal to its total variable costs. O O ь is zero. гето. O is equal to its total fixed costs. cannot be determined. Refer to the diagrams, which show the demand and cost curves for a perfectly competitive firm producing output and the demand and supply curve for the industry in which it operates. Which of the following is correct? ATC AVC...
Suppose one firm in a perfectly competitive industry experiences an increase in its costs of production. Which of the f...
Suppose one firm in a perfectly competitive industry experiences an increase in its costs of production. Which of the following best describes the most likely long run adjustment to this situation? a. Eventually, all firms in the industry will also experience this same increase in costs. b. Eventually, all firms in the industry will experience a decrease in costs. c. Eventually, the price of the product will increase, and consumers will pay for the increase in costs. d. The firm...
For a perfectly competitive industry in the long run, which of the following is false?
Questions are referring to No. 5-18For a perfectly competitive industry in the long run, which of the following is false? Price equals average total cost. Average total cost equals marginal cost. Average fixed cost equals price Average total cost is at its minimum O O O There is allocative efficiency.
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of...
Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of $200,000 per year when producing 1,000 units of output per year. In this case its average revenue is $200 and its marginal revenue is __ zero. also $200 less than $200. O greater than $200 Question 32 2.5 pts 32. In a perfectly competitive industry, the market price of the product is $12.Firm A is producing the output at which average total cost equals...
Please explain the process to solve these A firm in a perfectly competitive industry is producing...
Please explain the process to solve these
A firm in a perfectly competitive industry is producing 1,000 units of output and earning total revenue of $55,000. If average total cost is equal to $60, marginal cost is equal to $55, and fixed costs are equal to $1,000 at that level of output, what should the firm do to maximize profit? VIEW RESULTS START shut down MC138716 increase output MC138717 decrease output (but not shut down) MC138718 The firm is already...
Use the following graphs for a perfectly competitive market in the short run to answer the next question. MC...
Use the following graphs for a perfectly competitive market in the short run to answer the next question. MC ATC P D MR 0 What will happen in the long run to market supply and the equilibrium price of the product? Multiple Choice Market supply will decrease and equilibrium price will decrease. Market supply will increase and equilibrium price will increase. Market supply will increase and equilibrium price willl decrease. nt Multiple Choice Market supply will decrease and equilbrium price...
Assume that the average wage of workers increases in a perfectly competitive industry. This change will result in a(n): Multiple Choice O increase in marginal costs for firms in the industry and a rightward shift in the industry supply curve. O decrease in marginal costs for firms in the industry and a leftward shift in the industry supply curve. O decrease in marginal costs for firms in the industry and a rightward shift in the industry supply curve. increase in...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
The loss of a perfectly competitive firm which shuts down in the short run: Multiple Choice O is equal to its total variable costs. O O ь is zero. гето. O is equal to its total fixed costs. cannot be determined. Refer to the diagrams, which show the demand and cost curves for a perfectly competitive firm producing output and the demand and supply curve for the industry in which it operates. Which of the following is correct? ATC AVC...
Suppose one firm in a perfectly competitive industry experiences an increase in its costs of production. Which of the following best describes the most likely long run adjustment to this situation? a. Eventually, all firms in the industry will also experience this same increase in costs. b. Eventually, all firms in the industry will experience a decrease in costs. c. Eventually, the price of the product will increase, and consumers will pay for the increase in costs. d. The firm...
Questions are referring to No. 5-18For a perfectly competitive industry in the long run, which of the following is false? Price equals average total cost. Average total cost equals marginal cost. Average fixed cost equals price Average total cost is at its minimum O O O There is allocative efficiency.
Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of $200,000 per year when producing 1,000 units of output per year. In this case its average revenue is $200 and its marginal revenue is __ zero. also $200 less than $200. O greater than $200 Question 32 2.5 pts 32. In a perfectly competitive industry, the market price of the product is $12.Firm A is producing the output at which average total cost equals...
Please explain the process to solve these
A firm in a perfectly competitive industry is producing 1,000 units of output and earning total revenue of $55,000. If average total cost is equal to $60, marginal cost is equal to $55, and fixed costs are equal to $1,000 at that level of output, what should the firm do to maximize profit? VIEW RESULTS START shut down MC138716 increase output MC138717 decrease output (but not shut down) MC138718 The firm is already...
Use the following graphs for a perfectly competitive market in the short run to answer the next question. MC ATC P D MR 0 What will happen in the long run to market supply and the equilibrium price of the product? Multiple Choice Market supply will decrease and equilibrium price will decrease. Market supply will increase and equilibrium price will increase. Market supply will increase and equilibrium price willl decrease. nt Multiple Choice Market supply will decrease and equilbrium price...
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