Homework Answers
Second option and third option is correct
because the market is competitive and it is already operating in the long run there is no tendency for any new firm to enter the market. This is because there is no economic profit earned by any firm. price should be equal to the minimum of average cost and is also equal to the marginal cost. Allocative efficiency is registered because price is equal to marginal cost.
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Suppose society is producing a perfectly competitive good or service at the lowest possible cost in...
For a perfectly competitive market made up of firms represented in the graph below, what is...
For a perfectly competitive market made up of firms represented in the graph below, what is the long run equilibrium price of the good? Cost ($) MC ATC AVC $16 $14 $12 $10 Quantity $14 $10 $12 $16 For a perfectly competitive market made up of firms represented in the graph below, if the price is $14, Cost ($) MC ATC $16 AVC - $14 $12 $10 Quantity The firm is operating at its minimum long run average total cost....
8. A perfectly competitive firm is earning an economic profit. In the short run it should...
8. A perfectly competitive firm is earning an economic profit. In the short run it should In the long run it should A. shut down; expand B. produce where MC = MR; leave the industry C. produce where MC = MR; expand production D. shut down; exit the industry 9. In the long-run equilibrium of a competitive market with identical firms, what is the relationship between price P, marginal cost MC, and average total cost ATC? A. P> MC and...
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...
If a perfectly competitive firm is producing 150 units of output at a price of P=$20,...
If a perfectly competitive firm is producing 150 units of output at a price of P=$20, where the MC of the 150th unit of output is MC=$20, the ATC of the 150th unit is ATC=$10, and the AVC of the 150th unit is AVC=$8, then which of the following statements is not correct? a. The firm should shut down when the price is less or equal to $8. b. The firm is producing at the profit maximizing level of output....
Question: These diagrams, pertain to a perfectly competitive firm producing output q and the industry in...
Question: These diagrams, pertain to a perfectly competitive firm producing output q and the industry in which it operates. What should we expect in the long run on the number of firms, market supply and equilibrium price? MC ATC AVC MR P
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter...
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
18. In a perfectly competitive market, individual firms set: A) prices and quantities B) neither prices...
18. In a perfectly competitive market, individual firms set: A) prices and quantities B) neither prices nor quantities. C) quantiies but not prices D) prices but not quantities 19. The perfectly competitive firm faces a perfectly elastic demand curve because A) t has the ability to set the price and force everyone to buy at that price. it has no ability to control price. B) C) t doesn't; it faces a perfectly inelastic demand curve D) it doesn't; everyone knows...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using...
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using the optimal amount of capital for the long-run, total cost is C(q)=1000+(q2/10), ATC(q)=(1000/q)+q/10, and marginal cost is MC(q)=2q/10. This implies that ATC=MC at a quantity of 100 and a per unit cost of $20. 1. At what quantity is average total cost minimized? 2. What is the long-run competitive equilibrium price? 3. If market demand is QD=12,000-200P and short-run market supply is QS=300P, what...
If a perfectly competitive firm is producing at the P MC output and realizing an economic...
If a perfectly competitive firm is producing at the P MC output and realizing an economic profit, at that output Multiple Choice marginal revenue is less than price. marginal revenue exceeds ATC ATC is being minimized total revenue equals total cost
For a perfectly competitive market made up of firms represented in the graph below, what is the long run equilibrium price of the good? Cost ($) MC ATC AVC $16 $14 $12 $10 Quantity $14 $10 $12 $16 For a perfectly competitive market made up of firms represented in the graph below, if the price is $14, Cost ($) MC ATC $16 AVC - $14 $12 $10 Quantity The firm is operating at its minimum long run average total cost....
8. A perfectly competitive firm is earning an economic profit. In the short run it should In the long run it should A. shut down; expand B. produce where MC = MR; leave the industry C. produce where MC = MR; expand production D. shut down; exit the industry 9. In the long-run equilibrium of a competitive market with identical firms, what is the relationship between price P, marginal cost MC, and average total cost ATC? A. P> MC and...
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...
Question: These diagrams, pertain to a perfectly competitive firm producing output q and the industry in which it operates. What should we expect in the long run on the number of firms, market supply and equilibrium price? MC ATC AVC MR P
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
18. In a perfectly competitive market, individual firms set: A) prices and quantities B) neither prices nor quantities. C) quantiies but not prices D) prices but not quantities 19. The perfectly competitive firm faces a perfectly elastic demand curve because A) t has the ability to set the price and force everyone to buy at that price. it has no ability to control price. B) C) t doesn't; it faces a perfectly inelastic demand curve D) it doesn't; everyone knows...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
If a perfectly competitive firm is producing at the P MC output and realizing an economic profit, at that output Multiple Choice marginal revenue is less than price. marginal revenue exceeds ATC ATC is being minimized total revenue equals total cost
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