Homework Answers
Ans) Monopolistic competition is where there are many sellers selling homogeneous but differentiated products. A profit maximising firm produces the quantity where MR and MC curve intersect and then uses demand curve to determine the price.
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II.A. Identify and label the profit-maximizing level of output (Q) that will be pursued by this...
II.E. Draw and label the rectangle that represents the "Operating Profit or Loss" generated by this...
II.E. Draw and label the rectangle that represents the "Operating Profit or Loss" generated by this 'monopolistic' firm. (5 Points). MC ATC AVC Market Demand Output (Q) MR II.F. What decision should this ‘monopolistic' firm above make regarding its short run operations; and Why? (5 Points) (Yes or No) Continue Operation/Production
Based on the level of output being produced, is this firm maximizing profit? What is the dollar...
Based on the level of output being produced, is this firm
maximizing profit? What is the dollar value of the
profit being earned by the firm? Use the lettering on
the graph to identify the area of profit.
How does the demand curve let you know this is a firm operating
in perfect competition?
What is the significance of Point E? Point F?
How much additional cost did the 500thunit add to
total cost? How do you know?
Explain how the market will adjust...
At the profit-maximizing output, total fixed cost MC MR ATC b AVC hkn Output Multiple Choice...
At the profit-maximizing output, total fixed cost MC MR ATC b AVC hkn Output Multiple Choice is fgab. is Ogan. is ba Dollars Saved 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. The average total cost curve for a perfectly competitive firm. Suppose the marginal cost curve...
G. What is the profit-maximizing level of output?What is the maximum level of profits that the...
G. What is the profit-maximizing level of output?What is the maximum level of profits that the farm can earn? H. What is the breakeven price? What is the break even quantity? 1. What is the shutdown price? What is the shutdown quantity? J. What happens to fixed costs in the long run? What are the breakeven and shutdown points in the long run? K. Graph TC, TVC, TFC, ATC, AVC, and MC. Include labels and units. 5. Suppose that a...
Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2,...
Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2, The firm faces a market price p = 50. (a) Write expressions for total revenue TR and marginal revenue MR as functions of output q. (b) Write expressions for average total cost ATC, average variable cost AVC, and marginal cost MC as functions of output q. (c) For what value of output is ATC minimized? (d) Find the profit maximizing level of output q...
draw graphs of each market structure using the following information: profit maximizing level of output 400...
draw graphs of each market structure using the following
information: profit maximizing level of output 400 price at
$100
I U U P S Rena + Shek. 3. Draw graphs of each market structure using the following information: Profit-maximizing level of output of 400 Price of $100 ATC of $70 when output = 400 a. Perfect competition MC MR ATC 400 b. Monopoly C. Monopolistic competition d. Oligopoly
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete...
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete the blank columns (5 points). Please create a table like mine and fill it. (b) Assume the price of this product equals $10. What's the profit-maximizing output (q)? (3 points). Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing a where P=MC.(2 points) (c) What is the profit? (3 points) TOTAL COST (TC) - the...
1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual...
1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual firm earning an economic profit, including MR, MC, AVC, and ATC. On the second, show the short-run market equilibrium price and quantity. Explain how the industry supply curve and the market equilibrium price and quantity are determined. 2. What is the relationship between the price on the two graphs? Why does this relationship exist? 3. Explain why a firm in a perfectly competitive industry...
Consider a firm whose production function is Q = 0.4K0.5 L0.5. Its level of capital is...
Consider a firm whose production function is Q = 0.4K0.5 L0.5. Its level of capital is fixed at 100 units, the price of labor is PL = $4 per unit, and the price of capital is PK = $2 per unit. Given this information, the firm's cost structure is given by: Group of answer choices TFC = 200, TVC = Q2/4, TC = 200 + Q2/4, AFC = 200/Q, AVC = Q/4, ATC = 200/Q + Q/4, MC = Q/2...
Consider a competitive firm with total costs given by TC(q) = 100 + 10q + q...
Consider a competitive firm with total costs given by TC(q) = 100 + 10q + q 2 The firm faces a market price p = 50. (d) Find the profit-maximizing level of output q^*. At this level of output, what are TR, TC, ATC, and π? (e) Graph the ATC, AVC, MC, and MR curves in a single graph, and indicate the profit-maximizing level of output. If there are profits, shade the region corresponding to profit and label it.
II.E. Draw and label the rectangle that represents the "Operating Profit or Loss" generated by this 'monopolistic' firm. (5 Points). MC ATC AVC Market Demand Output (Q) MR II.F. What decision should this ‘monopolistic' firm above make regarding its short run operations; and Why? (5 Points) (Yes or No) Continue Operation/Production
Based on the level of output being produced, is this firm
maximizing profit? What is the dollar value of the
profit being earned by the firm? Use the lettering on
the graph to identify the area of profit.
How does the demand curve let you know this is a firm operating
in perfect competition?
What is the significance of Point E? Point F?
How much additional cost did the 500thunit add to
total cost? How do you know?
Explain how the market will adjust...
At the profit-maximizing output, total fixed cost MC MR ATC b AVC hkn Output Multiple Choice is fgab. is Ogan. is ba Dollars Saved 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. The average total cost curve for a perfectly competitive firm. Suppose the marginal cost curve...
G. What is the profit-maximizing level of output?What is the maximum level of profits that the farm can earn? H. What is the breakeven price? What is the break even quantity? 1. What is the shutdown price? What is the shutdown quantity? J. What happens to fixed costs in the long run? What are the breakeven and shutdown points in the long run? K. Graph TC, TVC, TFC, ATC, AVC, and MC. Include labels and units. 5. Suppose that a...
draw graphs of each market structure using the following
information: profit maximizing level of output 400 price at
$100
I U U P S Rena + Shek. 3. Draw graphs of each market structure using the following information: Profit-maximizing level of output of 400 Price of $100 ATC of $70 when output = 400 a. Perfect competition MC MR ATC 400 b. Monopoly C. Monopolistic competition d. Oligopoly
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete the blank columns (5 points). Please create a table like mine and fill it. (b) Assume the price of this product equals $10. What's the profit-maximizing output (q)? (3 points). Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing a where P=MC.(2 points) (c) What is the profit? (3 points) TOTAL COST (TC) - the...
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