Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variablecost (AVC) curves for a typical firm in the industry.7216AVC162440QUANTITY (Thousards of jaats)For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assumethat when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizingquandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e wmake a prafit, suffer a loss, ar break even at each price.PriceQuantity(Dollars per jacket)(Jackets)Produce or Shut Down?Profit or Loss?412364860 On the fallowing graph, use the arange points (square symbal) to plot paints alang the partion af the firm's shart run supply curve that correspondsto prices where there is positive output. (Note: You are given mare points to plot than you need.)72Fimis Stort-Run Supply56161624406412QUANTITY (Thousands oft)Suppose there are 9 firms in this industry, each of which has the cost curves previously shown.On the following graph, use the arange points (square symbol) to piot points alang the partion of the industry's shart-run supply curve thatcorresponds to prices where there is pasitive output. (Note: You are given more paints to ploe than you need,.) Then, place the black point (plussymbol) on the graph to indicate the shart-run equilibrium price and quantity in this marketNote: Dashed drop lines will automatically extend to both axes.Dermand72Industry's Short-Run BuspyEcuilibrium40121672144 21 20 300 432 504 S 4 720QUANTITY (Thousards of jaats)At the current short-run market price, firms wilv in the short run. In the long run,ecet nduo) o

A firm will produce to the point where MC=AVC and can shutdown if there is a loss. It is also to be…

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC, and average variable cost (AVC) curves for a typical firm in the industry. 72 ATC AVC 24 40 72 QUANTITY (Thousarda of jacuta For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profit. Assume that when the price is exactly equal to the average variabie cost, the firm is indiferent between praducing zero jackets and the profit-maximizing quantity. Also, indicate whether the fiem wil produce, shut down, ar be indiferent between the two in the short run. Lastiy, determine whether ie will make a prafie, suffera loss, ar break even at each price. Price Quantity (Dolars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 12 36 48 60 (nal susoo

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC, and average variable cost (AVC) curves for a typical firm in the industry. 72 ATC AVC 24 40 72 QUANTITY (Thousarda of jacuta For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profit. Assume that when the price is exactly equal to the average variabie cost, the firm is indiferent between praducing zero jackets and the profit-maximizing quantity. Also, indicate whether the fiem wil produce, shut down, ar be indiferent between the two in the short run. Lastiy, determine whether ie will make a prafie, suffera loss, ar break even at each price. Price Quantity (Dolars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 12 36 48 60 (nal susoo

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 13QP

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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)
The following graph plots daily cost curves for a firm operating in the competitive market for jumpsuits. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per jumpsult) 50 45 40 35 30 25 20 15 10 5 10 W 0 Y ATC AVC 2 MC 4 8 QUANTITY (Thousands of jumpsuits per day) 6 10 + 14 16 18 12 20 Profit or Loss In the short run, given a market price equal to $15 per jumpsuit, the firm should produce a daily quantity of of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a rt-run thousand per day for the firm. jumpsuits.
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)
Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 90 Profit or Loss 80 70 60 40 ATC 30 20 MC AVC 10 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of sweaters per day) In the short run, at a market price of $45 per sweater, this firm will choose to produce 45,000 sweaters per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $45 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be thousand per day in the short run. PRICE (Dollars per sweater)
Attempts: Average: 12 5. Profit maximization and shutting down in the short run Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. V ATC AVC PRICE (Dolars per watch) 100 5 MO 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY(Thousands of watches) For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) Price Quantity (Dollars per watch) (Watches) 25.00 40.00 65.00 Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars) (Dollars) 520,000 $20,000 520,000 (Dollars) If the firm shuts down,…
Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. PRICE (Dollars per watch) 100 90 80 70 60 50 40 30 20 10 0 0 MC ATC AVC + + 10 20 30 40 50 60 70 80 QUANTITY (Thousands of watches per day) 90 100 Profit or Loss ?
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The following graph plots daily cost curves for a firm operating in the competitive market for fitness trackers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE(Dollars pertracker) 100 90 70 60 50 40 20 10 0 0 MO ATC AVC 50 60 70 80 10 20 30 40 QUANTITY (Thousands of trackers per day) 90 100 Profit or Loss In the short run, given a market price equal to $45 per tracker, the firm should produce a daily quantity of trackers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.
Using graph, explain when the firm in a competitive market is in equilibrium?
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3. Profit maximization using total cost and total revenue curves Suppose Bob runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Bob's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Bob produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 O ☐ ☐ 0 1 2 3 4 5 QUANTITY (Teddy bears) ☐ 6 Total Cost 7 8 O Total Revenue Profit ?
Suppose the market for fresh pork is a competitive market. Initially, it is operatingat its long-run competitive equilibrium at a market price of $50.Owing to the spread of COVID-19, many people turn to buying frozen meat oncea week rather than fresh pork every day. As a result, the market price of fresh porkreduces to $30.a. With the aid of a pair of market-and-firm diagrams, illustrate how thiswould affect the equilibrium price and quantity in the fresh pork market andthe output of a typical butcher of fresh pork in the short-run.b. Suppose, for the situation in (a), the average cost of a typical butcher offresh pork is $40, which includes $15 on buying meat from suppliers, $12on paying rent, $8 on paying hourly wages on staff, and $5 on other costs.Explain whether a typical butcher should shut down in the short run.