How does fixed cost affect marginal cost? Do fixed costs affect perfectly competitive firm’s output decisions in the short run? Briefly explain your answer. Are there fixed costs in the long run? Do fixed costs affect perfectly competitive firm’s output decisions in the long run? Explain your answers briefly

What are transaction costs?  How do transaction costs affect the boundaries of a firm?

Farmer Lee grows strawberries. The average total cost and marginal cost of growing strawberries in the long run for an individual farmer are illustrated in the graph to the right. Suppose the market price is $7.05 per box. If so, then farmers will strawberries until the market price is $ number rounded to two decimal places.) per box. (Enter a numeric the market for a real enter exit Price and cost (dollars per box) 10- 9- 8- 5- 3- 2- 1. 0 MC ATC 10 20 30 40 50 60 70 80 90 100 Quantity of strawberries (boxes per week) o

teach this

For each price in the following table, use the graph to determine the number of lamps 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 lamps 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 (Dollars per lamp) 15 20 PRICE (Dollars per lamp 80 RS232 70 26 25 55 70 85 10 588 288 8 COSTS (Dolars) 20 On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) (? 10 0 10 D Quantity (Lamps) 0 0 Either 0 or 45,000 10 60,000 65,000 70,000 MC-D 20 D 20 30 40 50 60 75 NO QUANTITY (Thousands of…

4. Profit maximization in the cost-curve diagram Suppose that the market for black 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. PRICE (Dollars per sweater) 50 y ATC AVC 45 40 35 30 25 20 15 10 5 0 MC + 02 4 6 8 10 12 14 16 QUANTITY (Thousands of sweaters) 18 20 Profit or Loss ?

will need to upload your answers. Assume a company is producing 600 units of output per day and minimizing total cost with the following isoquant graph. Both the price of labor (w) and the price of capital (r) are $100 per day. Now assume they want to increase production to 800. Use the graph and complete sentences (and the numbers from the situation provided) to explain whether marginal cost would be higher in the short run or long run or will the MC be the same in both the SR and LR. That is, what is the MC is the short run and the MC in the long run? Explain. KI

“That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost curve constitutes the shortrun supply curve for the firm.” Explain using a graph and words.

V4

Are there fixed costs in the long-run? Explain briefly.