A purely competitive firm whose goal is to maximize profit will choose to produce the amount of output at which:.4 a. TR and TC are equal. b. TR exceeds TC by as much as possible. c. TC exceeds TR by as much as possible. d. none of the above.
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A purely competitive firm whose goal is to maximize profit will choose to produce the amount of output at which:.4 a. TR and TC are equal. b. TR exceeds TC by as much as possible. c. TC exceeds TR by as much as possible. d. none of the above.
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- In long-run competitive equilibrium, a firm that owns factors of production will have an A. economic profit > $0 and accounting profit = $0. B. economic profit = $0 and accounting profit > $0. C. economic and accounting profit can take any value. D. economic and accounting profit > $0. E. economic and accounting profit = $0.Is the firm making an economic profit or loss? Will firms enter or exit this market? 3. Sketch on the graph and explain what happens to bring this market to long run equilibrium.A firm is selling apples is profit-maximizing, but they're in a constant cost industry. The industry is perfectly competitive and currently in long-run equilibrium. Assume apples are a normal good and consumer income falls, and the firm continues to produce. 1. Illustrate the decrease in income in the short run with a cost curves graph. Make sure to highlight the area of loss.
- A) How does a competitive firm determine its profit-maximizing level of output? Explain.The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. a. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? b. Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. [Upload a picture] c. Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the marketThe diagram at the right shows the various short-run cost curves for a perfectly competitive firm. a. Based on the diagram, and the assumption that the firm is maximizing its profit, fill in the following table. The last three columns require only a "yes" or "no". Market Firm's Is Price > Is Price > Are Price ($) Output ATC? AVC? Profits Positive? $4 $5 $7 $8 $10 Price ($) $1Q $8 $7 $5 $4 135 MC 155:170190 210 Output ATC AVC
- 7. A perfectly competitive firm can sell its product for a price of 10. The firm's (short run) total cost function is: C(q) = 5 +3q+q². On a well-labeled graph, draw a figure illustrating the firm's profit at different levels of output. Show the profit-maximizing level of output on the graph. a. b. c. Write an expression for the firm's profit maximization problem. Solve the firm's profit maximization problem to determine the optimal level of output. Be sure to check whether or not the firm should shut down. d. Suppose instead that the price of the output falls to 5. Should the firm shut down? Explain. e. Suppose that instead of the cost function given above, the cost function is C(q) = 5 + 3q. The price of the good is 10. What happens if you try to maximize profit in this situation? Explain.Write True or False and explain briefly 1- Consider a firm in a perfectly competitive market.There are situations where it is optimal for the firm to continue operating in the short-run , but shut down in the long-run. 2- Consider a firm in a perfectly competitive market.There are situations where it is optimal for the firm to shut-down in the short-run , but continue to operate in the long-run.a. Calculate profit for each quantity. How much should the firm produce to maximize profut ? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at ) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?
- 2. A) In perfect competition marginal cost curve of a firm shows supply curve of the firm in short run. True/False. Elaborate your answer theoretically and graphically. B) Theoretically and graphically explain how firm choose optimum combination of inputs in short run and in the long run.17. A market is in long-run equilibrium and firms in this market have identical cost structures. Suppose demand in this market decreases. a. Describe what happens to the profit-maximizing output quantity for individual firms as the market leaves and then returns to long-run equilibrium. b. Describe what happens to the market quantity as the market leaves and then returns to long-run equilibrium.choose 1 if, for the last unit of a good produced by a perfectly competitive firm, MR>MC, then in producing it the firm: 1- added more to total revenue than it added to total costs 2-is maximizing marginal profit 3-has minimized its losses 4-added more to total costs than it added to total revenue
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