Answered: Which of the following is always true…

Which of the following is always true when a perfectly competitive firm is producing at a profit maximizing quantity of output: MR=MC P=MC Both A and B P>minATC . All of the above

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 2P

See similar textbooks

Related questions

Q: Determine and explain the profit maximization output of a perfectly competitive firm.

A: Perfect competition is a competition where both buyers and sellers have perfect information about a…

Q: xplain the three possible profit-maximizing positions of perfectly competitive firms in the short…

A: To expand profits in an entirely competitive market, firms set minor income equivalent to minimal…

Q: According to marginal analysis, a perfectly competitive firm will produce an output level where what…

A: According to marginal analysis, a perfectly competitive firm will produce an output level where…

Q: How would you describe the demand curve for the purely competitive firm? For the industry?

A: Purely competitive firms are characterised by being price takers where decisions are made…

Q: n the long run, perfectly competitive firms are at equilibrium when: (LMC = Long-Run Marginal Cost;…

A: Under a perfectly competitive market structure, the firms are price takers who accept the market…

Q: In the figure provided attached, which perfectly competitive firm (a, b or c) earns economics…

A: There are many firms in perfect competition and all firms are price takers and accept the market…

Q: A perfectly competitive firm does not increase its quantity of output without limit, even though it…

A: Answer: Introduction: A perfectly competitive firm is a price taker. In perfect competition, firms…

Q: must each perfectly competitive firm be in equilibrium if the industry is in the long-run…

A: Perfect competition refers to the situation where there are large number of prouder and consumers…

Q: Scenario: You and the other donut shops that just opened in your area are all selling the same basic…

A: The formulae used to solve the table are given below: TC = VC + FC TR = P *Q Pr = TR-TC MC = TRn -…

Q: At what output does a perfectly competitive firm maximize its profit? when marginal cost equals…

A: A perfectly competitive firm is the one where there are large number of buyers and sellers selling…

Q: If it is possible for a perfectly competitive firm to do better financially by producing rather than…

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…

Q: Suppose that the market for candy canes operates under conditions of perfect competition, that it is…

A: First price was $0.10 Cost increased by 0.05 0.10+0.05=0.15

Q: Assume the market for coffee mugs is perfectly competitive. Firms in the market are producing…

A: A perfectly competitive firm is a price taker and maximizes profit by producing at P =MC

Q: Use a graph to demonstrate the circumstances that would prevail in a perfectly competitive market…

Q: A perfectly competitive firm will maximize its profit when marginal revenue is greater than marginal…

A: Marginal Revenue is the cash a firm makes for each extra deal. As such, it decides how much a firm…

Q: “In a perfectly competitive market, firms always operate at the lowest per-unit cost." Is the…

A: A market(mkt) is said to be perfectly-competitive when there is a large number of buyers(b) and…

Q: Use a graph to show the situation that would prevail in a competitive market where firms are earning…

A: Perfect competition is a market form wherein the firms produce and sell homogenous goods and…

Q: Given the following information, state whether the perfectly competitive firm will shut down or…

A: The firm's production decision in short-run is based only on the variable cost and not fixed cost.…

Q: Is it true that a firm in a perfectly competitive market will never be able to earn positive…

A: There are different types of market which are broadly grouped as: Perfect competition and Imperfect…

Q: Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the…

A: A perfect competition(PC) market is one with many buyers and sellers producing identical products.…

Q: The table below displays cost information for a firm operating in a perfectly competitive market.…

A: The total cost of the firm is divided by the fixed cost and the variable cost. variable cost changes…

Q: Explain why a competitive firm’s marginal cost curve is the same as its supply curve.

A: In perfectly competitive market there are many sellers as well as buyers. Price is given that means…

Q: Which of the following is true for a perfectly competitive industry?

A: option 3 is rhe correct answer The firm in industry produce standardized products It's dentical…

Q: At what point would a competitive firm shut down in the short run

A: A competitive firm is a price taker, which means the firm takes the price determined by the market…

Q: the perfectly competitive market, the average total cost of the small business owner will be: A)2 B)…

A: Equilibrium under perfect competition is at price = MC level MC insects the pice at 23 units At Q =…

Q: The graph depicts the average total cost curve for a perfectly competitive firm. At the long-run…

A: In a perfectly competitive market, price is constant at all levels of output so it is equal to…

Q: In the long-run, perfectly competitive firms produce at the point where P = ATC MR = MC…

A: in perfect competitive market, there are many number of sellers and buyers which turns the market…

Q: Based on the characteristics of perfectly competitive market explain why firms in this market are…

A: Perfect competition is a type of market structure in which there are large number of buyers and…

Q: If a perfectly competitive firm’s supply curve is given by Q = -18 + P, which of the following is…

A: The supply curve, Q = -18 + P

Q: Consider a perfectly competitive market. A firm is producing at a level where MR = MC and P > ATC.…

A: Perfectly competitive market is the market in which there are large number of buyers and selling…

Q: n the short run, in order to maximize profit, a firm in a perfectly competitive market will operate…

A: A perfect competition is a structure of a market in which there are many sellers and buyers. The…

Q: In the long-run, perfectly competitive firms produce at the point where P = ATC MR = MC P = MC All…

A: Perfectly competitive market refers to a market structure where there are many firms and buyers.…

Q: ques. 46 The demand curve of a perfectly competitive firm is vertical. True False

A: A perfectly competitive market is a market, in which the number of buyers and sellers are infinite.…

Q: What is the most important decision a perfectly competitive firm must make to maximize profit? what…

A: In a perfectly competitive market, there are many buyers and sellers. The good produced is…

Q: condition for profit maximization for a pure

Q: Consider the perfectly competitive market for steel, which is in long-run equilibrium. Now the…

A: Perfectly competitive market- It is a market where there are large numbers of buyers and sellers and…

Q: Refer to the above graph for a purely competitive firm in the short run. What minimum output level…

A: In order to answer this question, it is imperative to understand the concepts of breakeven and…

Q: Illustrate and fully discuss the derivation of the demand curve for a perfectly competitive firm

A: Perfect Competition Conditions An economic examination of a company's production decisions considers…

Q: Marvin’s Milk Farm produces milk and sells it in a perfectly competitive market at $4 per bottle.…

A: In order to calculate the combination of the labor and capital that produces 100 bottles of milk per…

Q: If the price was given what is the formula equation to figure the "profit-maximizing quantity of…

A: Perfect competition is a market situation where there are many buyers and sellers. Thus, the firm is…

Q: In a perfectly competitive market with constant cost industry and with the market demand…

A: Let this be the long run TC= 100 + 4q2 Then ATC=TC/q LRATC=100/q+4q Minimizing this :Putting the…

Q: Assume the firms in a perfectly competitive market are initially incurring economic losses. An…

A: The perfectly competitive firm is a price taker and can sell any quantity of commodity at the market…

Q: At the profit-maximizing output level, what will be the relationship between the perfectly…

A: A profit-maximizing output level is when that gives highest returns to the firm as any change in…

Q: Discuss why a firm in perfect competition may choose to be open on Mondays, typically the slowest…

A: Perfectively competitive firm:-

Question

Which of the following is always true when a perfectly competitive firm is producing at a profit maximizing quantity of output:

MR=MC
P=MC
Both A and B
P>minATC
. All of the above

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In terms of the relationship between MR and MC, a firm in perfect competition will expand output when MR is _____ MC and will decrease output when MR is _____ MC.
If a firm in a perfectly competitive market maximizes short-run profits by producing some quantity of output, which of the following must be true at that level of output?
Define perfect competition. Does a firm under perfect competition always make supernormal profit? Explain your answer with appropriate diagrams.
In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?
Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per cardigan) 40 35 30 25 20 15 10 50 0 1 2 4 3 5 QUANTITY (Cardigans) 6 7 8 Marginal Revenue Marginal Cost Iyana's profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is , an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardigan beyond the profit maximizing quantity) is S an amount than the price received for each cardigan they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the curves. Because Iyana is a price taker, the previous condition is equivalent to
Is the following statement true? "A firm that operates in a perfectly competitive market will earn long run economic profit by process innovation".
“In a perfectly competitive market, firms always operate at the lowest per-unit cost." Is the preceding statement true or false? Explain your answer.
In the long-run, perfectly competitive firms produce at the point where P= ATC MR = MC %3D P = MC All of these statements are true
Rambutan is a fruit prized in Eastern Asia for its unique hairy look. Once peeled, it reveals a sweet, slightly sour, grape-like, gummy-tasting fruit. The graph shows the average total cost, marginal revenue, and marginal cost curves of a perfectly or (purely) competitive rambutan farmer. This firm is incurring a firms will this market. In the long run, What is this firm's profit or loss, rounded to the nearest penny? If the market price fell to $9.51, the firm would Price per bushel $12.11 10.11 9.51 MR C 5.4 A MC B ATC 7 Quantity (bushels)
Suppose that Betty's Beads is a typical firm operating in a perfectly competitive market. Currently Betty's MR = $ 9 , MC = $ 12 , ATC = $ 10 , and AVC = $ 8 . Based on this information, we can conclude that
The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal profit in the long run, why would any firms bother to develop new products or lower-cost production methods? Explain.
“If Conagra is a competitive firm, it will never operate at an output where its average total cost curve is downward sloping.” True or false? Explain. I think it's false, but I don't know why though