Question 32 Draw a graph to demonstrate the circumstances that would prevail for a perfectly competitive firm where it is incurring economic losses but not shutting down. You will need to draw and identify the Demand (D), Marginal Revenue (MR), Marginal Cost (MC), Average Total Cost (ATC), and Average Variable Cost (AVC), curves on your graph. Additionally, indicate the Quantity (Q) and Price (P) Explain why wouldn't your firm shut down in the short run? Use the editor to format your answer
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- How would you calculate a firms total cost and total revenue using this graph?Calculate the amount of profit or loss made by this firm at the equilibrium output. State the type of profit.PRODUCTION| 2 8 10 12 14 LEVEL MARKET 3 3 3 3 PRICE ТОTAL INCOME TOTAL FIXED 14 14 14 14 14 14 14 COST ТОTAL 4.5 5.5 6.7 8.2 10 13.25 VARIABLE 25 COST TOTAL COST TОTAL BENEFIT MARGINAL 3 3 3 3 INCOME AVERAGE TOTAL COST Develop the following numerical example of perfect competition, which should add the procedure for calculating the missing costs, income, and profit. Considering the following data: a) Indicate at what level of production the MC is equal to the price, so that the company is perfectly competitive in the short term. 3. 3.
- Concept: Revenue of a Firm Farmer Jones grows oranges in Florida. Suppose the market for oranges is perfectly competitive and that the market price for a crate of oranges is $11 per crate. Fill in total revenue, average revenue, and marginal revenue in the table below. (Enter your responses as integers.) Average Marginal Revenue Crates of Market Price Total Revenue Revenue (per crate) $11 Oranges (TR) (AR) (MR) $ 1 11 $ $ 2 11 3 11 4 11 5 11What does acceptable loss mean for a competitive firm? Explain and Draw a graphSuppose Felix runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Felix's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Felix produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 0 1 ● ^ 2 O ☐ A ☐ A 3 4 5 QUANTITY (Frying pans) O ☐ 6 Total Cost ☐ 7 8 o Total Revenue Profit ? image 1 Calculate Felix's marginal revenue and marginal cost for the first seven frying pans he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.
- Assume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $56.00 (i) Will this firm produce in the short run? (Click to select) No Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select) Not applicable Loss-minimizing…Assume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $ 60.00 $ 45.00 $ 105.00 $ 45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 a. At a product price of $56.00 (i) Will this firm produce in the short run? yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? profit- maximizing output = 9 units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 16 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the…he table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that roduces children's mittens in a competitive market. Smitten's Production Costs Quantity (pairs of mittens) Marginal Cost (dollars) $1.60 Average Total Cost (dollars) $2.2 2.17 2.21 25 30 2.00 35 2.45 3.55 4.00 40 2.38 45 2.56 2.85 50 5.50 55 6.00 3.14 60 8.50 3.58 Instructions: In part a, enter your answer as a whole number. In parts b, c. and d, round your answers to two decimal places. a. If the market price of children's mittens is $6.00 per pair, how many palrs of children's mittens should Smitten produce per week to maximize its profits? pairs of mittens b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens? %24 3.28 c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of mittens? d. What are Smitten's weekly…
- Help Save & Exit Submit The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that produces children's mittens in a competitive market. Smitten's Production Costs Quantity (pairs of mittens) 15 Marginal Cost (dollars) $1.60 Average Total Cost (dollars) $1 20 2.00 1.25 25 2.45 1.49 30 3.55 4.00 1.83 35 2.14 40 5.50 6.00 8.50 2.56 45 2.94 50 3.5 Instructions: In part a, enter your answer as a whole number. In parts b, c and d, round your answers to 2 decimal places. a. If the market price of children's mittens is $6.00 per pair, how many pairs of children's mittens should Smitten produce per week to maximize its profits? pairs of mittens b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens? 24 c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of mittens? p..........: d.…QUESTION 17 Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 QuantityHow would you draw a firm graph from a perfectly competitive constant cost market in the short run where there are economic losses.