Figure 14-3 Suppose a firm operating in a competitive market has the following cost curver: *** • Refer to Figure 14-3. The firm will earn zero economic profit if the market price is O so $6. $7. ATC $10. 147100
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- Suppose a firm operating in a competitive market has the following cost curves: MC ATC AVC # Q3 04 PS P3 Figure 14-6 Price 01 02 Refer to Figure 14-6. Firms will be earn losses in the short run but will remain in business if the market price a. exceeds P3. b. is less than P1. e is greater than P1 but less than P3. d. exceeds P2.and cost 20 15 14 11 MC ATC 750 1.100 1.350 1,800 AVC MR Quantity Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry. Refer to Figure 12-5. If the firm's fixed cost increases by $1,000 due to a new environmental regulation, what happens in the diagram above? None of the curves shifts; only the fixed cost curve, which is not shown here, is affected. All the cost curves shift upward. Only the average variable cost and average total cost curves shift upward: marginal cost is not affected. Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:1. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?2. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?3. Comment on your answers to parts (1) and (2).
- Figure# 1: The cost structure for a firm in a competitive market. MC ATC P5 P4 AVC P3 P2 P1 10 11 12 Quantity (per day) 8. Refer to Figure #1. When price falls from P4 to P2, the firm finds that it can minimize its profit loss by producing its output at, O 11 unitc OTune hera to cearch. Price and costs (dollars)Q23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.Bookmarks Profiles Tab Window Help Table 12-1 Quantity 0 100 200 300 400 500 600 #3 Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Total Cost (dollars) $1,000 1,360 1,560 1,960 2,760 E 51) Refer to Table 12-1. If the market price of each camera case is $8, what is the firm's total revenue when the profit-maximizing quantity is found at the output where MR = MC? B) $3,200 C) $4,000 D) $4,800 A) $2,400 Page Ref: 401-402 D ture.com/courses/2244593/files/144593507?module_item_id=37898795 $ 4 4,000 5,800 R FI Variable Cost (dollars) $0 360 560 960 1,760 3,000 4,800 % 5 T MacBook Pro G ^ 6 Y 87 & H U * 8 J - ( 9 O 49) V 51) ) 0 K L P
- Price per Tonne of Wheat MC 18.00 ATC 17.00 15.75 16.00 15.25 1550 15.00 14.00 13.00 12.00 11.00 500 1000 ++ 1500 Tonnes of Wheat per Month Figure 9-5 shows the cost curves of a firm in a perfectly competitive market. If the market price is $17 and the firm is maximizing profit, how much is its total cost? OA. $20 400 OB. $17 000 OC. $18 300 OD. $15 000Figure 22-13 Price MC AVC * P₁ P₁ Pa P₁ . 0,0₂ Q₂ Q ATC Quantity Refer to Figure 22-13. If the market price this price-taker firm faces were to rise from P3 to P4, in the short run the firm would and from caming zero economic profit to positive economic profit.Graph below represents the cost structure of an individual firm in a perfectly competitive market. ATC MC 50 40 e AVC 30 20 10 8 10 11 12 Quantity (per day) a. Write down the break-even and the shut-down points (both corresponding quantities and prices) for this firm on the table below. quantity (q) Price (P) Break-even Point Shut-down Point b. If the price in this market is $50, find the profit maximizing output of firm A by explaining the profit maximizing condition for a perfectly competitive firm. Calculate total revenue, total cost, total variable cost and the profit of the firm at the profit maximizing output. Show your calculations If the price decreases to $25. C. i. Considering the short-run: would firm earn positive or negative profit in this new scenario? Would it continue operating or stop production? Explain your answer ii. Considering the long-run: would new firms enter to the market or would existing firms exit from it? What would happen to the market equilibrium?…
- Question 14 Questions 14-18 refer to Figure 5-1 below. Suppose a firm operating in a perfectly competitive market has the following cost curves: Figure 5-1 MC ATC P4 P3 P2 2 P1 Price AVC Q102 03 04 Q5 Quantity Refer to Figure 5-1. When price rises from P2 to P3, the firm finds that... marginal cost exceeds marginal revenue at a production level of Q2. if it produces at output level Q3 it will earn a positive profit. O expanding output to Q4 would leave the firm with losses. it could increase profits by lowering output from Q3 to Q2.MC АТС $25.00 AVC $19.50 -- $15.00 $12.50 - - 30 40 50 60 Output (Q) For the firm shown in the diagram above, its Long Run Supply Curve is its curve for any price greater than ATC; $19.50 MC; $12.50 AVC; $12.50 MC; $19.50Suppose a firm in a competitive industry has the following cost curves: 10 9 8 7 6 5 4 3 2 1 Price + 1 + + + 2 3 4 5 MC ATC AVC P1 P2 P3 P4 + 6 7 8 Quantity Refer to Figure 14-13. If the price is P1 in the short run, what will happen in the long run? Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. Because the price is below the firm's average variable costs, the firms will shut down.
