(Table: Blueberry Farm) Use Table: Blueberry Farm. Suppose there are 100 farms in this industry with identical cost curves, as shown in the table. If the price is $4 per pound: Table: Blueberry Farm Quantity of Blueberries (in pounds) 0 1 2 3 4 5 6 7 Total Cost $2 7 11 13 16 21 28 38 a) firms will enter the industry. b) firms will exit the industry. c) the industry has maximized average total cost d) the industry is in long-run equilibrium 4

(Table: Blueberry Farm) Use Table: Blueberry Farm. Suppose there are 100 farms in this industry with identical cost curves, as shown in the table. If the price is $4 per pound: Table: Blueberry Farm Quantity of Blueberries (in pounds) 0 1 2 3 4 5 6 7 Total Cost $2 7 11 13 16 21 28 38 a) firms will enter the industry. b) firms will exit the industry. c) the industry has maximized average total cost d) the industry is in long-run equilibrium 4

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?

See similar textbooks

Similar questions

What two lines on a cost curve diagram intersect at the shutdown point?
Price and cost (dollars per student) $150 120 88 76 72 ATC 40 - MC MR 24,000 30,000 36,000 Quantity of students enroiled 15,000 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "I think the course should be priced so that the maximum number of students enroll." Which price should this faculty member favor? O A. $0 В. $40 C. $88 D. $150
15. The table below shows cost data for producing different amounts of refrigerators. Use the given information to answer the questions below. Quantity Total Cost Variable Cost Marginal Cost Average Variable Cost Average Total Cost in $ in $ in $ in $ in $ 241 0 271 30 361 120 491 250 681 440 901 660 0 10 What is the profit (loss) at that level of production? 20 30 40 50 How many refrigerators would a competitive firm produce if the market price was $19? 3 9 13 19 22 3.00 6.00 8.33 11.00 13.20 27.10 18.05 16.37 17.02 18.02
100 90 80 70 60 ATC 50 40 30 20 AVC МС О 10 + 0 0 5 10 15 20 30 35 40 45 50 QUANTITY (Thousands of shirts) or each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume hat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing uantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will nake a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Profit or Loss? Produce or Shut Down? Shut down 10 20,000 Loss Shut down 20 10,000 Loss Shut down 32 5,000 Loss Either 0 or 37,500 Shut down 40 Loss 25 COSTS (Dollars)
1. A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright? 2. Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed cost is$800, of which $600 is avoidable if it shuts down? Explain.
The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. (?) PRICE (Dollars per romper) 50 45 40 3.5 30 20 15 10 10 5 0 + 0 2 MC ATC AVC 4 6 8 12 14 16 QUANTITY (Thousands of rompers per day) 10 18 H 20 Profit or Loss
Principles of Microeconomics Name: Homework #3 Prof. R. Harris DUE: Wednesday, April 17, 2019 at the beginning of class - NO EXCEPTIONS. Please remember to show all work and please be neat. Please staple this if you print it on your own. 1. Consider the following table of numbers, which represents demand and cost conditions for a com firm. petitive TR 600 0 1 2 $o $400 600 $400 $240 600 $430 $670 $960 $1,350 $1,840 $2,440 $3,120 $3,910 $4,800 600 600 600 600 600 600 5 6 7 600 600 9 10 (a) Fill in the missing values (b) Use the information in the chart to determine what level of output the firm should produce. Explain your reasoning.
3. You own WYNELL's Fashions, which sells prom dresses. Your firm has the following cost schedule: If vou produce this quantity The average total cost per dress is ... $100 40 $101 41 Your current output is 40 prom dresses, all of which have been sold. You receive a call from an eager potential customer, who offers to pay $150 if you will produce a prom dress for her Calculation space to show your work What would your profit or loss be on the 41st prom dress? (Show your work.)
1. Mariel runs an ice cream shop. Her short-run cost is given by 300 + is the number of ice cream cones she sells per day. + 3q where q 3000 (a) Find mathematical expressions for Mariel's marginal cost, average variable cost, and average total cost. (b) Sketch' Mariel's marginal cost, average variable cost, and average total cost. (c) Suppose the market price for ice cream cones is $3. How many ice cream cones will Mariel supply? What will her profits be? Identify your answers on the diagram and then compute the values mathematically. (d) Find the minimum market price such that Mariel will stay in business in the short-run, both on your diagram and mathematically. (e) Assume that Mariel can only run an ice cream shop of this size and in the long run must decide whether to operate or not. (In other words, assume that Mariel's LRAC curve is her short-run average total cost curve.) Identify the minimum market price such that Mariel will stay in business in the long-run on your diagram.…
only typed answer Assume a competitive firm faces a market price of $120, a cost curve of: C = 13q3 + 20q + 500, and a marginal cost of: MC = q2 +20. What is the firm's profit maximizing output level? ?? Units (round your answer to two decimal places) What is the firm's profit maximizing price? ??? (round to the nearest penny) What is the firm's profit? ??? (round to the nearest npenny) In the short-run, this firm should ?? produce or shut down??
Figure: Cost Curves for Corn Producers Price, cost of bushel $30 26 MC 22 18 ATC AVC 14 10 1 3 4 7 Quantity of corn (bushels) Reference: Ref 12-3 (Figure: Cost Curves for Corn Producers) Look at the figure Cost Curves for Corn Producers. The market for corn is perfectly competitive. If the price of a bushel of corn is $10, in the short run, the farmer will produce of corn and earn an ec omic equal to 2 bushels; profit; $0 2 bushels; loss; just more than $80 per bushel 3 bushels; profit; loss, -$15 4 bushels; profit; just less than $80 per bushel
Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price (P) Per Hour (Q) 0 123 456 7 8 $6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 Total Cost (TC) $2.00 6.00 9.00 11.50 13.50 15.00 16.00 17.50 20.00 loaves of ciabatta bread per hour. (Enter your response as an integer.) a. To maximize profits, Maria should sell Maria should charge a price of $ (Enter your response rounded to two decimal places.) Maria's maximum profit is $ (Enter your response rounded to two decimal places.) b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is $ (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is $. (Enter your response rounded to two decimal places.)