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Since firms want to maximize profits, why wouldn't producers necessarily want to produce output at the...
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
help!!! Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency? The output of the monopolist will be too large and the price too high The output of the monopolist will be too small and the price too low The output of the monopolist will be too small and the price too high d. The price will be too high, but the impact of monopoly on the output is...
1.Consider an industry with only two firms that produce identical products. Each of the firms only incurs a fixed cost of $1000 to produce and marginal cost is 20. The market demand function is as follows: Q=q1+q2=400-P a. Assuming that the firms form a cartel, calculate the profit-maximizing quantity of output, price and profits b. If the firms choose to behave as in the Cournot model, what would be the profit- maximizing quantities of output, price and profits? c. if...
48. Which statement explains why free markets fail to produce public goods? Firms do not want to produce the good because they fear competition will drive the price down below costs. Consumers do not want to buy the good because the price is higher than the value of benefits they would receive. ° Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the...
QUESTION 22 All firms, regardless of market structure, maximize profits by choosing a level of output such that: a. Marginal revenue equals marginal cost b. Marginal cost is zero c. Price equals marginal cost d. Marginal cost is minimized
Refer to the table below to answer the questions. qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 1100401404040 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.43 2.1) If the market price is $20, then this firm will maximize profits by producing ________ units of output. (1M)2.2) If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ________. (1M)2.3) If the market price is $84, then in the long run...
To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of...
Find the value of Q when Firms A and B Cournot compete to maximize profits (i.e. when they simultaneously determine profit maximizing output). Firm A and Firm B compete in the sale of a product with market inverse demand given by P(0) = 260-Q, where Q is market output, and Q = 9A + 96 (9A = Firm A's output, 93 = Firm B's output). Firm A's Total Cost function is given by TCA9A) = 209A and Firm B's is...
22. Refer to Figure K. For this farmer to maximize profits he should produce _______ bushels of wheat. A) 6 B) 9 C) 12 D) 16 23. Refer to Figure K. If this farmer is maximizing profits, his profit will be A) $45 B) $48. C) $72. D)-$24. 24. Refer to Figure K. This farmer would earn a zero economic profit if price was A) $7 B) $9 C) $10. D) $13. 25. Refer to Figure K. This farmer's shutdown point is at a price of _______ ;this...
Question 1. A perfectly competitive firm seeking to maximize its profits would want to maximize the difference between? Select one: a. either a or d. b. its marginal revenue and its marginal cost. c. its total revenue and its total cost. d. its average revenue and its average cost. e. its price and its marginal cost. Question text 2. A profit-maximizing monopolist sets? Select one: a. output where demand equals average total cost. b. output where marginal cost equals average...