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Below is a graph of an individual firm in a perfectly (purely) competitive industry. Adjust the...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
Take a look at the statements below about a purely (or perfectly) competitive market. Indicate whether...
Take a look at the statements below about a purely (or perfectly) competitive market. Indicate whether each statement is true or false by moving the true or false labels to the appropriate boxes. 1. In general, the market demand curve in a purely competitive market is perfectly elastic. False True 2. In general, an individual firm in a purely competitive market faces a perfectly elastic demand curve. 3. An individual firm in a purely competitive market can obtain a higher...
Suppose that the price of corn, a crop produced in a perfectly (or purely) competitive industry,...
Suppose that the price of corn, a crop produced in a perfectly (or purely) competitive industry, increased 208% last year as demand for corn based ethanol fuel increased. What do you expect to happen in the long run for the corn industry given this recent success? The price per bushel of corn will continue to increase, yielding higher profits. Thus more firms will enter the market indefinitely. Profits will become negative due to over farming, which will result in the...
Problem 1. (13 points) Markets: Perfect Competition. Assume that a perfectly competitive, constant cost industry is...
Problem 1. (13 points) Markets: Perfect Competition. Assume that a perfectly competitive, constant cost industry is in a long run equilibrium with 35 firms. Each firm is producing 90 units of output which it sells at the price of $39 per unit; out of this amount each firm is paying $5 tax per unit of the output. The government decides to decrease the tax, so the firms will be paying $3 tax per unit. a) Explain what would happen in...
A firm in a perfectly competitive industry faces the following long run total cost schedule: Perfect...
A firm in a perfectly competitive industry faces the following long run total cost schedule: Perfect Competition Quantity 2 4 6 8 10 12 14 16 Total Cost 50 100 140 160 240 360 600 750 Given this data, we would expect the long run price of the product to be about: A. None of the above B. $15 C. $20 D. $22 E. $25
1) Compared with a purely competitive industry, a monopolist produces a. more output at a lower...
1) Compared with a purely competitive industry, a monopolist produces a. more output at a lower price. b. less output at a higher price. c. more output at a higher price. d. less output at a lower price. 2) Which one of the following statements about monopoly firms and firms in a purely competitive industry is true? a. In the long run, monopoly firms and firms in a purely competitive industry operate at the minimum point of their average total...
The first picture below depicts the cost curves for a representative firm in this perfectly competitive industry. Initia...
The first picture below depicts the cost curves for a
representative firm in this perfectly competitive industry.
Initially, there are 100 firms. The second picture depicts market
demand.
A) Suppose that the firm produces 300 units of output, how much
are their total costs?
B) What is the short-run equilibrium price?
C) At the short-run equilibrium price, what is the quantity
produced by each firm?
D) At the short-run equilibrium price, what is per-firm
profit?
E) In the long-run,...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A....
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
The graph presents the costs and revenue for a perfectly (purely) competitive firm, where the market...
The graph presents the costs and revenue for a perfectly (purely) competitive firm, where the market price is equal to $600 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the optimal output and profit for this firm. What is the optimal output of this perfectly (purely) competitive firm? (Round your answer to the nearest whole number.) Cost and revenue $2400 2200 2000 1800 Average 1600 total cost Marginal cost Average...
2. A perfectly competitive potato farm is currently in long run equilibrium. a. Graph the firm...
2. A perfectly competitive potato farm is currently in long run equilibrium. a. Graph the firm in long run equilibrium. Be sure to label all of the curves and the profit maximizing price and quantity. b. The demand for potatoes increases. Draw a new graph that shows the impact on an individual firm. Be sure to shade the area of loss or profit. c. Draw a new graph that shows how the firm and the industry adjusts to a new...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
Take a look at the statements below about a purely (or perfectly) competitive market. Indicate whether each statement is true or false by moving the true or false labels to the appropriate boxes. 1. In general, the market demand curve in a purely competitive market is perfectly elastic. False True 2. In general, an individual firm in a purely competitive market faces a perfectly elastic demand curve. 3. An individual firm in a purely competitive market can obtain a higher...
Suppose that the price of corn, a crop produced in a perfectly (or purely) competitive industry, increased 208% last year as demand for corn based ethanol fuel increased. What do you expect to happen in the long run for the corn industry given this recent success? The price per bushel of corn will continue to increase, yielding higher profits. Thus more firms will enter the market indefinitely. Profits will become negative due to over farming, which will result in the...
The first picture below depicts the cost curves for a
representative firm in this perfectly competitive industry.
Initially, there are 100 firms. The second picture depicts market
demand.
A) Suppose that the firm produces 300 units of output, how much
are their total costs?
B) What is the short-run equilibrium price?
C) At the short-run equilibrium price, what is the quantity
produced by each firm?
D) At the short-run equilibrium price, what is per-firm
profit?
E) In the long-run,...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
The graph presents the costs and revenue for a perfectly (purely) competitive firm, where the market price is equal to $600 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the optimal output and profit for this firm. What is the optimal output of this perfectly (purely) competitive firm? (Round your answer to the nearest whole number.) Cost and revenue $2400 2200 2000 1800 Average 1600 total cost Marginal cost Average...
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