Price and Cost 961 The graph below contains the relevant cost curves for a perfectly (or purely) competitive firm. The graph below is not graded. You can move point A to help you answer the questions. 1000 900 800 700 600 500 400 300 200 100 0 0 MC Quantity ATC AVC AFC 100 200 300 400 500 600 700 800 900 1000 860 The price of the good must be above what point for the firm to earn positive economic profits? Number $600 What is the shutdown price for this firm? Number $400

Price and Cost 961 The graph below contains the relevant cost curves for a perfectly (or purely) competitive firm. The graph below is not graded. You can move point A to help you answer the questions. 1000 900 800 700 600 500 400 300 200 100 0 0 MC Quantity ATC AVC AFC 100 200 300 400 500 600 700 800 900 1000 860 The price of the good must be above what point for the firm to earn positive economic profits? Number $600 What is the shutdown price for this firm? Number $400

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Using the following graph of the cost curves for a firm. Complete the statement below. yice MC AC AVC 15 AFC Qutity Which best describes the firms short run capacity? MC = AFC MC = AVC AVC = ATC AVC = AFC MC = AC Using the following graph of the cost curves for a firm. Complete the statement below. yice MC AC AVC 15 10 AFC Qurtity Which price would best describe the firm is making an economic profit? 15 10 8 5 Using the following graph of the cost curves for a firm. Complete the statement below. yice AC AVC 15 10 5 AFC Qurtity Which price would best describe the break even point for this firm? O 15 12.5 10 16 Using the following graph of the cost curves for a firm. Complete the statement below. yice MC AC AVC 15 10 AFC Quantity Which price would best describe the shut down condition for this firm? 15 12.5 16 10 10 5 5
Based on the graph: a. Is this market more efficient or less efficient compared to perfect competition. Give two reasons for your answer. b. If this were a perfectly competitive market, what would be the market price? What would be the efficient scale of the firm?
Assignment Instructions: Find the Graphs for a Pure Competition Firm Do a Google Images and find the graphs for a perfectly competitive firm. graphs must include the following specific graphs: Find the graph for short run economic loss for the firm. Find the graph for short run economic profit for the firm. Find the graph for long run – normal profit for the firm. Make sure the graphs show the area of economic profit or loss.
ATC 12 Q 1000 1500 1800 Use the graph above to answer the following questions. The graph represents a perfectly competitive firm where the market price is $4. AVC
a. 3 b. 9 c. 2 d. 10 e. 5
Microeconomics
Thinking on the Margin to Increase Profitability Have you ever walked into a restaurant for lunch and found it almost empty? Why, you might ask, does the restaurant even bother to stay open? It might seem that the revenue from so few customers could possible cover the cost of running the restaurant. Provide an opinion using the concepts of sunk costs, marginal cost and marginal revenue.
A company in a competitive market has fixed costs of $200. A total cost curve is given in the table below. Given the data, answer the questions below. Output: 10 20 30 40 50 60 Total Cost:300 420 560 720 900 1100 a. Given the price is $20, what is the profit-maximizing output? What is the profit? b. Given the price is $20, what will happen in the long run? c. At the long-run equilibrium, what will the price be in the long run? What is the profit-maximizing output? What is the profit of the company? d. Prepare marginal cost schedule cost schedule for the firm.
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10. The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of output is $3 and there are no fixed costs, what is the profit-maximizing level of output?
Concept: Revenue of a Firm Farmer Jones grows oranges in Florida. Suppose the market for oranges is perfectly competitive and that the market price for a crate of oranges is $11 per crate. Fill in total revenue, average revenue, and marginal revenue in the table below. (Enter your responses as integers.) Average Marginal Revenue Crates of Market Price Total Revenue Revenue (per crate) $11 Oranges (TR) (AR) (MR) $ 1 11 $ $ 2 11 3 11 4 11 5 11
QUESTION 1 A perfectly competitive firm has the following total cost function: Total output Total Cost 0 20 1 30 2 42 3 55 4 69 5 84 6 100 7 117 How much will the firm produce if the price of the production the market is Rs. 14 per unit? How will it change its output if price rises to Rs. 16 per unit?