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3. Explain under each of the situation, a firm working under a
a. P=7;
b. P=12; ATC=10; AVC=8 and Q=20
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- What are the four basic assumptions of perfect competition? Explain in words what they imply for a perfectly competitive firm.A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How small is small?In the argument for why perfect competition is allocatively efficient, the price that people are willing to pay represents the gains to society and the marginal cost to the film represents the costs to society. Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?
- Do entry and exit occur in the short run, the long run, both, or neither?3. Explain under each of the situation, a firm working under a perfectly competitive market would keep on producing or shut down. Show using diagram and also explain the condition thoroughly. a. P=14; AC=16; AVC=10 and Q=40 b. P=10; AC=10; AVC=8 and Q=205. John Capellini owns a small vineyard and sells wine. The market for his type of wine is fully competitive. John's cost function per bottle is TC = 800 +2Q +.5Q². If John can sell his wine for $32 per bottle, how many bottles should he produce? a. 1884 b. 800 c. 40 d. 30.
- Suppose, at a given point in time, Stephanie's Soda Fountain sells ice cream in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average total cost of producing ice cream is $3.30, average variable cost is $2.50, and marginal cost is $3.50. Over time, Stephanie's output of ice cream will everything else held constant. Select one: OA. decrease OB. remain unchanged OC. increaseQuestion What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a C d Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should…Show all the necessary steps and/or reasoning that lead to your answers. No credits will be given to answers without necessary steps and/or reasoning. 1. Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market. AFC Output Fixed Cost 1 2 3 4 5 $50 $50 $50 $50 $50 Variable AVC Cost $30 $50 $80 $120 $170 Total cost ATC MC a. Fill in the blank columns b. What is the minimum price needed by the firm to break even? c. What is the shut down price? d. At a price of $40, what output level would the firm produce? What would its profits be? 2. What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?
- I need help with econ multiple hw questions asap! 60) When a firm in a competitive market produces 15 units of output, it has a marginal revenue of $8.00. What would be the firm’s total revenue when it produces 8 units of output? A. $64.00 B. $48.00 C. $6.00 D. $4.80 59) The competitive firm’s long-run supply curve is that portion of the marginal-cost curve that lies above which average cost? A. sunk cost B. total cost C. variable cost D. fixed costMC ATC 24 P = MR 20 18 4 100 350 500 700 q Bales of hay from the graph of a perfectly competitive firm above, answer the following questions:# 1. What is the profit maximization level of of output? ( 2. What is the value of ATC at the best level of output? 3. what is the amount of profit the firm makes at that level of output? show your calculations. 4. At what price firm will breakeven В I