A perfectly competitive industry currently has 100 identical firms in the short run, each of which has fixed costs of $8 and average variable costs as follows: Quantity Average variable cost Marginal cost Average total cost Total cost N/A N/A N/A 1 5 5 6 11 a) Complete the above table by computing the total cost, marginal cost, and average total cost for each quantity from 1 to 6. Submit the completed table in your answer. b) Suppose the market equilibrium price is currently $15. How much will each firm produce in the short run? What is the aggregate supply in this market in the short run? c) The initial market equilibrium price is still $15, but we now consider what will happen in the long run, when firms can freely enter and exit the market. Suppose that all entrants have the same costs, and that these costs are as in the previous table. As this industry makes the transition from short run equilibrium to its long-run equilibrium, how will the new equilibrium price change? Will it increase or decrease? Will the quantity supplied by each firm change? Will it increase or decrease? Will there be any change on the demand side? 2. 3. 4.

Initially, all firms in a perfectly competitive market are in long-run equilibrium. Assume that the market demand for the product produced by the firms in the market suddenly rises. Suppose the following graph shows the marginal revenue (MR) and marginal cost (MC) curves of a firm in this market at its initial long-run equilibrium, with an equilibrium price of P₁ and a profit-maximizing quantity of output of Q₁. Show the short-run effect of the increase in market demand on this firm by shifting the marginal revenue curve, the marginal cost curve, or both on the following graph. PRICE AND COST 2 MC Q₂ QUANTITY In the short run, the firm will respond by producing In the long run, some firms will respond by PRICE MR QUANTITY Supply MR Demand O Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects and the new long-run equilibrium after firms finish adjusting to the increase in market demand. MC the industry. Demand goods and…

You are the owner of a firm in a perfectly competitive market. The market supply and demand are given by the equations: D: P=8 - 0.1Q S: P = 0.2 + 0.05Q Your firm's marginal cost curve and total cost curve are: MC = 0.1 + 0. 2q TC = 20.425 + 0. 1q +0.1q? What is the firm's profit (positive) or loss (negative) ? O 2.2 (profit) O 18.225 (profit) O -18.225 (loss) -2.2 (loss)

On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves). Now assume the market price, P, is such that it intersects the upward-sloping portion of MC above ATC. Graphically depict the short-run equilibrium q (representative firm's output) and π (representative firm's profit) under this price scenario.

There are 80 firms of type A and 60 firms of type B in a perfectly competitive market. On one hand, type A firm faces a fixed cost (all sunk) of $12 and average variable cost is 2q. On the other hand type B firm faces a fixed cost (all sunk) of $10 and the variable cost is 3q. Market demand function is given by Q=1200-70 P. Find the equilibrium price in the market. $7 $8 $12 $10

Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 ATC(Q) = +;Q, average variable cost is equal to AVC(Q) Q, and marginal cost is equal to MC(Q) = Q. How many ice cream cones will each producer sell in a long-run equilibrium in the market for ice cream?

Which of the following is a true statement about the difference between a price-taker firm and a competitive price-searcher firm in the long run (more than one answer is correct)? Both will sell their products at a price equal to average total cost, but only the price-searcher will produce at minimum average total cost. Both will sell their products at a price equal to marginal cost, and only the competitive price searcher will produce at minimum average total cost. Only the price searcher will sell its product at a price equal to marginal cost. Only the competitive price taker will sell its product at a price equal to marginal cost. Both will sell their products at a price equal to average total cost, but only the price-taker will produce at minimum average total cost.

Consider a perfectly competitive market where all firms produce using the same technology. In the long run the equilibrium price equals (Need help? Read chapter 4.6 of the textbook, here: https://playconomics.com/textbooks/view/playconomics4-2019t3/part2/ch4/s6) the Fixed Cost. the minimum Marginal Cost. the minimum Average Total Cost. the maximum Average Variable Cost. None of these.

The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level maximizing its profit. Consider the level of profits being earned here, and what will happen over time. What will happen in the long run? Note that the horizontal demand curve, D1, is also equivalent to marginal revenue and price.      Group of answer choices The market price will increase causing economic profits to increase Demand will increase causing economic profits to increase The market price will decrease until economic profit is zero

If there were 60 firms in this market, the short-run equilibrium price of titanium would be $________ per kilogram. At that price, firms in this industry would (earn a positive profit, shut down, earn zero profit, operate at a loss). Therefore, in the long run, firms would ( enter, exit, neither enter nor exit) the titanium market.   Because you know that perfectly competitive firms earn (positive, zero, negative) economic profit in the long run, you know the long-run equilibrium price must be $_______ per kilogram. From the graph, you can see that this means there will be (20, 40, 60)  firms operating in the titanium industry in long-run equilibrium.