Homework Answers
15) Answer: 4$
The point where MC equal AVC is know as the shut down point and that price is called as shut down price
16) Answer: 6$
The point where MC equal ATC is the point which is called as break even point and that price is called break even price.
17) Answer: 6$
In the long run when there will be no profit for the firms hence in the long run when the MC equals ATC at a price which is the market price in the long run where they will not earn profits.
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Answers for 16 and 17 and18 Figure #i-Perfectly Competitive Industry io АТС Econ 112 Take-Home Quiz 3 15" (using the information in Figure #1). The shut-down price is: A. $2 B. $4 C. $6 D. $8...
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 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...
8. In the short run, a perfectly competitive firm will shut down if it is producing...
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
¬8) Assume a perfectly competitive industry. In the short run suppose that the market price for the good is $10. You als...
¬8) Assume a perfectly competitive industry. In the short run suppose that the market price for the good is $10. You also know that the minimum point on the average variable cost curve occurs at $6 per unit while the minimum point on the average total cost curve occurs at $11 per unit. From this information you know that in the short run, firms in this industry ____ and in the long run, holding everything else constant, there will be...
Exhibit 8-16 Short-run cost curves for a competitive firm In Exhibit 8-16, if the market price...
Exhibit 8-16 Short-run cost curves for a competitive firm In Exhibit 8-16, if the market price of its product is $50 per unit, then the firm will: Group of answer choices A. have a loss B. shut down. C. exit the industry. D. earn a zero economic profit. -мс. 100 90 80 Cost 70 АТС per unit 60 50 -AVC- (dollars) 40 30 20 10 3 4 5 6 7 8 0 1 2 Quantity of output (units per hour)
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...
16. Assume the current price is Pa and the firm belongs A. firms will exit the...
16. Assume the current price is Pa and the firm belongs A. firms will exit the industry and the long-run price will B. C. D. Answer the next tea questions on the basis of the information in Figure 1 to a decreasing-cost industry. In the long run: be Ps firms will exit this industry and the long-run price will be greater than P2, but less than P firms will exit this industry and the long-run price will be greater than...
Part 1. 1. Use the figure above to answer this question. Consider a perfectly competitive market experiencing good time...
Part 1.
1. Use the figure above to answer this question.
Consider a perfectly competitive market experiencing good times.
Figure ________ shows a firm maximizing profit in the LONG RUN
because it produces ________ units and makes an economic profit of
________.
A) A; 100; $2 per unit
B) A; 90; $3 per unit
C) B; 100; $0 per unit
D) C; 100; $3 per unit
Part 2.
2. The figure above shows a firm's demand and marginal
revenue curves...
8. Refer to the graph above depicting a perfectly competitive firm. When maximizing profit, the total...
8. Refer to the graph above depicting a perfectly competitive firm. When maximizing profit, the total profit earned by the firm represented is: A. $220. B. $275. C. $330 D. $605, 26. Refer to the graph above of a monopolistically competitive firm. If the firm maximizes profit, it will earn: A. zero economic profit this year. B. $320,000 economic profit this year. C. 584,000 economic profit this year. D. $56,000 economic profit this year. ATC AVC - 01 02 03...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
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...
8. In the short run, a perfectly competitive firm will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is A. Greater than average total cost. B. Less than average total cost. C. Greater than average variable cost. D. Less than average variable cost E. None of the above 10. Given your answer to Question 8, what can you say about Hanna's firm: A. It should continue operating...
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...
16. Assume the current price is Pa and the firm belongs A. firms will exit the industry and the long-run price will B. C. D. Answer the next tea questions on the basis of the information in Figure 1 to a decreasing-cost industry. In the long run: be Ps firms will exit this industry and the long-run price will be greater than P2, but less than P firms will exit this industry and the long-run price will be greater than...
Part 1.
1. Use the figure above to answer this question.
Consider a perfectly competitive market experiencing good times.
Figure ________ shows a firm maximizing profit in the LONG RUN
because it produces ________ units and makes an economic profit of
________.
A) A; 100; $2 per unit
B) A; 90; $3 per unit
C) B; 100; $0 per unit
D) C; 100; $3 per unit
Part 2.
2. The figure above shows a firm's demand and marginal
revenue curves...
8. Refer to the graph above depicting a perfectly competitive firm. When maximizing profit, the total profit earned by the firm represented is: A. $220. B. $275. C. $330 D. $605, 26. Refer to the graph above of a monopolistically competitive firm. If the firm maximizes profit, it will earn: A. zero economic profit this year. B. $320,000 economic profit this year. C. 584,000 economic profit this year. D. $56,000 economic profit this year. ATC AVC - 01 02 03...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
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