In the short run, a perfectly competitive firmSelect one:a. can earn a small economic profit while being shut down.b. incurs an economic loss if it shuts down.O c. does not consider total revenue in its shut down decision.O d. shuts down if it incurs any economic loss.

Perfect competition and short-run: The firms are the price taker, and there are free entry and exit…

In the short run, a perfectly competitive firm Select one: O a. can earn a small economic profit while being shut down. O b. incurs an economic loss if it shuts down. O c. does not consider total revenue in its shut down decision. O d. shuts down if it incurs any economic loss.

In the short run, a perfectly competitive firm Select one: O a. can earn a small economic profit while being shut down. O b. incurs an economic loss if it shuts down. O c. does not consider total revenue in its shut down decision. O d. shuts down if it incurs any economic loss.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 20 MC ATC AVC 16 12 8. 5 10 15 20 25 30 35 40 45 50 Quantity (units per day) In the above figure, at…

A: A perfectly competitive market is one that has a large number of buyers and sellers, selling…

Q: 10 20 30 40 50 60 Quantity (units per day)

A: The given figure represents the case of a perfect competition market. This is a market structure…

Q: How much the Price for a perfectly competitive firm? O a. $20 O b. $15 O c. $25 O d. $10

A: The perfectly competitive market would result in the number of buyers and sellers in the market. The…

Q: 12 11 10 9 8 7 6.36 4.5 4 3 1 2 3 Select one: MC $1 ATC AVC The firm's short-run supply curve is its…

A: The perfectly competitive market refers to the market where all firms are price taker only. Market…

Q: The perfectly competitive firm should produce in the a. short run if price is below average variable…

A: Perfect Competition- It is a marketplace where a large size of the market create similar products…

Q: Question 42 If a perfectly competitive firm finds that price is less than average total cost, but…

A: Answer: If the price is less than the average total cost it means the firm is earning losses. But it…

Q: In a long-run competitive equilibrium, a restaurant owner who is just willing to continue operations…

A: When we talk about a perfect competitive market structure, we're talking about a market system where…

Q: 19. Refer to the following diagrams which pertain to a purely competitive firm producing output q…

A: Pure market: It refers to a market situation under which the large producers were unable to…

Q: What will most likely occur to the demand for this firm in the long run? O This firm is making zero…

A: In a monopolistically competitive market,when new firms enter consumers switch to their product and…

Q: A perfectly competitive firm will shut down rather than produce if its اختر أحد الخيارات .a. price…

A: Perfect competition is a market structure in which a large number of sellers sell homogeneous…

Q: Given a perfectly competitive firm, which of the following statements are true? Select one or more:…

A: In perfect competition, there exists a large number of firms selling identical goods. There is free…

Q: consider a perfectly competitive market with identical firms. Each firm has the usually shaped cost…

A: Under the perfectly competitive market: Price = MR = AR Profit maximization: MR = MC

Q: Assume the market for street food is perfectly competitive. If the price is $6.67 per serving, what…

A: Perfect competition markets are allocatively and productively efficient. It means output is always…

Q: QUESTION 16 Jose's restaurant operates in a perfectly competitive market. At the point where…

A: In the perfectly competitive market, if a firm is producing at a level where MR equals MC, this…

Q: In perfect competition marginal cost curve of a firm shows supply curve of the firm in short run.…

A: The perfectly competitive markets are characterized by the presence of a large number of buyers, and…

Q: Which statements is TRUE for a perfectly competitive firm that is in long-run equilibrium? O It is…

A: A homogeneous product that has a large number of sellers and buyers is known as the perfect…

Q: For a perfectly competitive firm. The profit-maximizing quantity of output is

A: A perfectly competitive firm is a price taker. It takes the price determined by the market and sells…

Q: To calculate total revenue, a perfectly competitive firm Select one: O.A. divides price by quantity…

Q: D Question 13 When price is below average variable cost, a firm in a competitive market will…

A: For a competitive firm, price on which it has to sell its output is given.

Q: If the price is $6 in the short run, what will happen in the long nun? Individual firms will earn…

A: here we find what will happen in the long run if the price is $6 in the short run as follow:-

Q: a. In the long-run in a decreasing-cost competitive industry, HD EDU's long-run supply curve is…

A: In a competitive constant-cost industry, each firm's long-run supply curve is its marginal cost (MC)…

Q: The demand curve perceived by a perfectly competitive firm O A. shows that such a firm is a…

A: A demand curve shows the amounts of a good that a consumer purcgase at different prices. Having…

Q: 5. "In perfect competition, firm's demand curve is:" O a. Perfectly Elastic (horizontal) O b.…

A: Option (a).

Q: Refer to the diagram to the right which shows cost and demand curves facing a profit-maximizing…

A: In this perfectly competitive market, all the firms sell exactly the same product at the same price.…

Q: A perfectly competitive firm's demand curve is Select one: O a perfectly inelastic O b. the same as…

A: Perfectly competitive market refers to that market in which the products are of homogeneous nature…

Q: 12. If the price is less than average total cost for a perfectly competitive firm in the short run,…

A: Perfect competition is the market structure where there are large no of buyers and sellers selling…

Q: 7. For a perfectly competitive firm, if total revenue is less than total cost but greater than total…

A: The total revenue is a product of quantity and average revenue (Price). So the average revenue or…

Q: A firm operating in a perfectly competitive industry will continue to operate in the short run but…

A: For Perfect competition, we know that P = MC AND P = MR

Q: Consider the following data facing a perfectly competitive firm: price = $20, quantity of output…

A: Answer: option (d) Explanation: Given: Price=$29Quantity produced=600 unitsAverage total…

Q: A perfectly competitive firm decides to shut down if: O the price falls below the…

A: This question pertains to the conditions under which a perfectly competitive firm decides to shut…

Q: Should a perfectly competitive firm keep producing even if it faces short-run losses? Please also…

A: A perfectly competitive firm is a kind of market participant characterized by being a price taker,…

Q: A generic firm can make all the following changes in the long run except Select one: a. Leave an…

A: In the long run, the firm try to optimize the level of production and earn economic profit.

Q: Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC=…

A: A perfectly competitive firm is a price taker, and that implies that it should acknowledge the…

Q: Zoe's Bakery operates in a perfectly competitive industry. The variable costs at Zoe's Bakery…

A: Perfectly competitive market is market structure, where firms are price taker and not price makers,…

Q: Figure 8.13 refers to a perfectly competitive firm. FIGURE 8.13 $100 MC 90 80 AC 70 AVC 60 50 40 30…

A: In a competitive market there are large number of firms producing identical products thus acting as…

Q: Which of the following is true of perfectly competitive firm that keeps producing in the short run?…

A: A perfectly competitive market is characterized by a large number of buyers and sellers. The price…

Q: Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 41312 10 8…

A: In perfect competition, There exists a large number of buyers and sellers. The firm produces…

Q: Consider a perfectly competitive firm with the following marginal cost (MC), average total cost…

A: Fixed cost does not depend on output produced. It remains constant even when firm produces 0 units

Q: The industry in the figure below consists of many firms with identical cost structures, and the…

A: The supply curve is the willingness to produce or sell a particular good or service in the market…

Q: Indicate whether you agree or disagree with the following statement. The marginal cost curve of any…

A: Marginal cost (MC) is the addition to the total cost when an additional unit of a good or service is…

Q: image attached

A: The goal of a firm is to maximise profits or minimize losses. The firm are able to do this goal by…

Q: 24. New firms will exit a perfectly competitive market when: Average variable costs are less than…

A: In a Perfect Competition, firms sell homogenous products and are price takers.

Q: In the long run, a perfectly competitive firm makes O A) either a positive economic profit or a…

A: Perfectly competitive market is the market in which all firms produce homogeneous product and sell…

Q: What is the term for the price at which the firm makes only normal profits? A) Shutdown price. O B)…

A: Profit refers to the situation where the total revenue is greater than the total cost of production.…

Q: If firms in a perfectly competitive industry are experiencing economic losses, cause industry supply…

A: In perfectly competitive market, there are many firms producing identical goods.

Q: In the short run, profits when a competitive firm shuts down are-$8200, and they are -$350 when the…

A: In the short run if the firm is earning losses and is unable to cover its variable cost then it…

Question

In the short run, a perfectly competitive firm
Select one:
a. can earn a small economic profit while being shut down.
b. incurs an economic loss if it shuts down.
O c. does not consider total revenue in its shut down decision.
O d. shuts down if it incurs any economic loss.

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

Consider the total revenue (TR), total cost (TC), and total variable cost (TVC) curves shown at right. In the short run, this perfectly competitive firm OA. should exit because it is losing money. B. should shut down because its profit is zero. OC. should increase the price. OD. could shut down. OE. is breaking even. Price (5) Quantity TC TVC TR
A perfectly competitive firm should shut down in the short-run if price falls below the minimum of A) average variable costs. B) marginal revenue. C) fixed costs. O D) average total cost. E) marginal cost.
Refer to the diagram which shows cost and demand curves facing a -V profit-maximizing perfectly competitive firm. If the firm chose to produce at price P, the firm would | Ex W es car es emi OA. break even. B. C. lose an amount more than fixed costs. D. lose an amount equal to its fixed costs. losean amount less than fixed costs. Price and cost P₁ P P a 0 Q₁ d MC e f ATC AVC 9 Q2 Q3 Q4 Q5 Qg Quantity
Consider the following figure for a perfectly competitive firm in the short run. Price, Costs MC ATC AVC 30 26 20 12 ------ 10 ..---- .---- 8 12 21 30 32 40 Output Suppose the industry price is $20. If the firm produces its profit-maximizing or loss-minimizing output, then it will make a equal to Loss; $420 Profit ; $240 Loss ; $180 Loss; $240
QUESTION 22 What happens if a single firm in a perfectly competitive market raises its price above that charged by other firms? O a. It loses market share O b. Nothing happens because it has loyal customers O c. It goes out of business O d. It makes supernormal profit until other firms follow
Question 7 If a perfectly competitive firm incurs an economic loss, it should: O Shut down if this loss exceeds fixed cost. O Try to raise its price. O Shut down in long run. O Shut down immediately.
Consider a perfectly competitive firm's average total cost curve, average variable cost curve, and marginal cost curve. MC ATC 30.00- 28.00- 26.00- If the market price is $15.00 per unit the firm will V by 24.00- producing. AVC 22.00- In the short run, the firm should 20.00- 18.00- experience losses O A. shut down; price is greater than AVC 16.00- 14.00- 12.00- 10.00- O B. shut down; price is less than ATC make a profit OC. shut down; price is less than FC break even 8.00- O D. continue to produce; price is greater than 6.00- O E. continue to produce; price is greater than AVC 4.00- 2.00- 0.00- 6 Quantity Price and cost
In Perfect Competition, all firms in a market O have the same revenue structure. have the same cost structure. O make the same profit. O charge the same price.
Refer to the diagram to the right which shows cost and demand curves facing a profit - maximizing perfectly competitive firm. At price P3¹ the firm would O A. lose an amount less than fixed costs. OB. break even. OC. lose an amount more than fixed costs. D. lose an amount equal to its fixed costs. C P Price and cost U D 0 a ठ 1 C d MC e f Q3 Q4 Quantity ATC AVC g Q
Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. O b. decrease their output. Oc make no adjustments as they are already maximizing their profits. Od. increase their output. Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where…
Which of the following best describes the short-run supply curve for an individual perfectly competitive firm? Select one: a. It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. Ob. It is the upward-sloping part of the firm's marginal cost curve. O c. It is the firm's marginal cost curve. Od. It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.
For a perfectly competitive firm, price is the same as O A. marginal revenue. O B. average variable cost O C. total revenue O D. Both answers A and B are correct.