Homework Answers
(1) (D)
If P < ATC, firm incurs loss.
(2) (A)
Artificially scarce (club) goods are non-rival but excludable in consumption.
(3) (A)
Starbucks quality is perceived to be of higher quality.
(4) (C)
Advertising is a strategy for product differentiation.
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A perfectly competitive firm will produce: O only when it earns profits in the short run....
The long-run supply curve for a perfectly competitive, constant-cost industry O is horizontal at minimum ATC....
The long-run supply curve for a perfectly competitive, constant-cost industry O is horizontal at minimum ATC. O is upward-sloping. O is horizontal at minimum AVC. O is found by adding up the marginal cost curves for all firms in the industry. As more firms enter the market: O the short-run market demand curve shifts to the left. O the short-run market supply curve shifts to the right. O the short-run market supply curve shifts to the left. O the short-run...
Q. If a firm is earning short-run economic profits, in the long run Group of answer...
Q. If a firm is earning short-run economic profits, in the long run Group of answer choices a. firms enter the industry, the market supply curve shifts rightward, and the market price falls. b. firms exit the industry, the market supply curve shifts rightward, and the market price falls. c. firms exit the industry, the market supply curve shifts leftward, and the market price falls. d. firms enter the industry, the market supply curve shifts rightward, and the market price...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs for each firm are given by SMC = q + 2 and market demand is given by Qd = 1000-20P (5pts) Calculate the short run equilibrium price and quantity for each firm.. b. (3pts) Suppose each firm has a U-shaped, long-run average cost curve that reaches a minimum of $10. Calculate the long run equilibrium price and the total industry output.. (4pts) What is...
theoretically, product differentiation in a monopolistically competitive market will lead to a. short-run economic profits greater...
theoretically, product differentiation in a monopolistically competitive market will lead to a. short-run economic profits greater than 0 b. competitors leaving the market c. long-run economic profits less than 0 d. the demand curve of the firm's product shifting to the left e. all of the above
A firm in a perfectly competitive market has a short-run total cost curve of ST C(Q)...
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...
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...
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices...
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices of the goods and services firms sell rise more rapidly than the prices they pay for inputs. O B. An increase in market prices results in an increase in quantities supplied, as stated by the law of supply. O C. As the number of workers, machinery, and equipment increase, and technological changes occurs, quantity supplied increases. O D. All of the above cause the...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
If the donut industry is perfectly competitive and is in long-run equilibrium, then the price of...
If the donut industry is perfectly competitive and is in long-run equilibrium, then the price of a donut Question 20 options: A) equals long-run average cost. B) is greater than marginal cost. C) is greater than long-run average cost. D) is greater than short-run average cost. The industry that produces zangs is in long-run equilibrium. Then the demand for zangs increases permanently. As a result, firms in the industry will ________. Some firms will ________ the industry, and the industry...
Please answer both of the following questions. A perfectly competitive firm is maximizing profits in the...
Please answer both of the following questions.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which o can be positive, negative, or zero. O exist at the point at which price equals total cost. O must be positive. o must be either zero or positive. QUESTION 31 A constant-cost industry O has a horizontal long-run supply curve. O generates increasing profits whenever demand increases because...
The long-run supply curve for a perfectly competitive, constant-cost industry O is horizontal at minimum ATC. O is upward-sloping. O is horizontal at minimum AVC. O is found by adding up the marginal cost curves for all firms in the industry. As more firms enter the market: O the short-run market demand curve shifts to the left. O the short-run market supply curve shifts to the right. O the short-run market supply curve shifts to the left. O the short-run...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs for each firm are given by SMC = q + 2 and market demand is given by Qd = 1000-20P (5pts) Calculate the short run equilibrium price and quantity for each firm.. b. (3pts) Suppose each firm has a U-shaped, long-run average cost curve that reaches a minimum of $10. Calculate the long run equilibrium price and the total industry output.. (4pts) What is...
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...
Why does the short-run aggregate supply curve slope upward? O A. Profits rise when the prices of the goods and services firms sell rise more rapidly than the prices they pay for inputs. O B. An increase in market prices results in an increase in quantities supplied, as stated by the law of supply. O C. As the number of workers, machinery, and equipment increase, and technological changes occurs, quantity supplied increases. O D. All of the above cause the...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
Please answer both of the following questions.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which o can be positive, negative, or zero. O exist at the point at which price equals total cost. O must be positive. o must be either zero or positive. QUESTION 31 A constant-cost industry O has a horizontal long-run supply curve. O generates increasing profits whenever demand increases because...
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