MC Price AC £/unit AVC D2 D3 D1 D4 Quantity/ week Figure 10 Cost curves for a firm Figure 10 shows the cost curves for a firm in perfect competition. Select the demand curve shown on Figure 10 to represent to represent the minimum price at which the firm will continue to supply in the short run, i.e. show the shutdown point. Select one: O D2 O D3 O D1 O D4

Consider a competitive firm with total costs given by T C(q) = 100 + 10q + q^2. The firm faces a market price p = 50. (a) Graph the AT C, AV C, MC, and MR curves in a single graph, and indicate the profit maximizing level of output. If there are profits, shade the region corresponding to profit and label it. (b) If fixed costs increase from 100 to 500, what happens to the profit maximizing level of output, T R, T C, and π? (c) If fixed costs increase from 100 to 500, should the firm continue to operate in the short-run? What about the long-run?

1) The cost curves for a firm in a perfectly competitive industry are given below. Complete the table. If the firm operates in a perfectly competitive market, and the market price is $25 per unit, what Quantity should this firm produce at? TFC TC TVC AVC ATC MC TR S100 S100 1 S100 S130 2 S100 S150 S100 S160 S100 S172 5 S100 S185 6 S100 $210 S100 $240 S100 $280 S100 $330 10 S100 $390 Table 9.1

Total Revenue $5,000 per Week $2,600 per Week $2,400 per Week Total Variable Cost Total Fixed Cost Let us suppose Harry's, a local supplier of chill and pizza, has the revenue and cost structure shown here. Multiple Choice Harry's should stay open in the short run. Harry's should shut down in the long run. Harry's should shut down in the short run. Harry's should stay open in the short run but shut down in the long run.

Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph

6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. COSTS (Dollars) 100 20 80 TO 0 □ 5 D MC-D Price (Dollars per lamp) 10 20 32 40 50 60 ATC AVC Quantity (Lamps) DO 15 QUANTITY (Thousands of lamps) 50 For every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. ? Produce or Shut Down? Profit or Loss?

You are given the following information for a producer of organic grommets in a perfectly competitive market. TFC = $7 Market price = $16 Quantity MC ($) 11 9 10 4 12 15 6 19 The marginal cost of production appears in the table above. What is the profit-maximizing output? Is the firm making a profit or loss? How much? Output: |(Click to select) v$

The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 20 1.00 25 2.00 1.20 30 2.46 1.41 35 3.51 1.71 40 4.11 2.01 45 5.43 2.39 50 5.99 2.75 55 8.47 3.27 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? 2$ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? 2$

Question 16 Refer to Figure 5-1 The firm will earn positive economic profits if the price is P4 only O P4 or P3 only P4, P3, or P2 only O any of P4, P3, P2, or P1

The table below shows the price and cost information for a firm that operates in a perfectly competitive market. Based on this information, what is the profit-maximizing output quantity? Price Quantity Total Cost $8 $8 $8 $8 $8 $8 $8 $6 $10 $15 $21 $28 $35 $45 1 2 3 4 5 6 Profit is maximized at a quantity of type your answer. units, where it is equal to $ type your answer. Is the long run price in this market likely to be higher or lower than the current price of $8? type your answer.