please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly If price is greater than the average variable cost and less than the average total cost at the profit-maximizing quantity ofoutput in the short run, a perfectly competitive firm will:produce more than the profit-maximizing quantity.produce at an economic loss.shut down production.produce at an economic profit.

Given that price (P) is greater than the average variable cost (AVC) and less than the average total…

Answered: If price is greater than the average…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 12SQ

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Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following? a. the price of corn b. the profitability of corn farmers who quickly adopt the new technology c. the profitability of corn farmers who are slow to adopt the new technology d. the price of soybeans, a substitute product for corn
A firm sells a product in a purely competitive market . The marginal cost of the product at the current output is $5.25 and the market is$5.90 . What should the firm do?
A profit-maximizing business incurs an economic loss of $$30,000 per year. Its fixed cost is $45,000 per year. Should it produce or shut down in the short run? Explain Should it stay in the industry or exit in the long run? Explain
In the short run, a perfectly competitive firm A) can vary all its inputs. B) can make only zero economic profit. C) can possibly make an economic profit or possibly incur an economic loss. D) produces the level of output that sets the average total cost equal to the market price. E) can change only its fixed inputs.
A firm produces a product in a competitive industry and has a total cost function C = 80 + 4q + 2q2 and a marginal cost function MC = 4 + 4q. At the given market price of $28, the firm is producing 7 units of output. Is the firm maximizing its profit? What quantity of output should the firm produce in the long run?
A perfectly competitive firm produces the level of output at which MR=MC on the rising portion of the firm’s marginal cost curve. At that output level, it has the following costs and revenues: TC = $830,000 VC = $525,000 TR = $428,000 At that optimal level of output, what profit (loss) does the firm earn?
The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. The price of fertilizer must be equal to average variable cost. The price of fertilizer must be less than marginal cost. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. Average total cost will decrease. The quantity supplied by each firm will decrease. The total quantity supplied to the market will decrease. Marginal cost will decrease. The price of fertilizer will increase.
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The market for smoothies is perfectly competitive and the market demand schedule is in the first two columns in the below table. Each of the 100 producers of smoothies has the costs given in columns 3- 6 when it uses its least-cost plant. What is the market price of a smoothie? $5.25 $4.25 $2.91 $2.20 Market demand schedule Quantity demanded (smoothies per hour) 1,000 Price (dollars per smoothie) 1.90 2.00 2.20 2.91 4.25 5.25 5.50 950 800 700 550 400 300 Output (smoothies per hour) 3 4 5 6 7 8 9 Producers of smoothies Costs Marginal cost (dollars per additional smoothie) 2.50 2.20 1.90 2.00 2.91 4.25 8.00 Average variable cost (dollars per smoothie) 4.00 3.53 3.24 3.00 2.91 3.00 Average total cost 3.33 7.33 6.03 5.24 4.67 4.34 4.25 4.44
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A perfectly competitive firm should produce in the short run if its total revenue is sufficient to cover its: total variable costs. total fixed costs. total costs. marginal costs.

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