ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- 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 P1arrow_forwardIn the short run, a perfectly competitive firm's economic profits Question 7 options: must be negative, that is the firm must incur an economic loss. might be positive, negative (an economic loss), or zero (a normal profit). must be positive. must equal zero, that is, the firm earns a normal profit.arrow_forwardNonearrow_forward
- MC АТС $25.00 AVC $19.50 -- $15.00 $12.50 - - 30 40 50 60 Output (Q) For the firm shown in the diagram above, its Long Run Supply Curve is its curve for any price greater than ATC; $19.50 MC; $12.50 AVC; $12.50 MC; $19.50arrow_forwardA foodstuff firm has variable cost function: VC = 2q(q+1). The foodstuff market is considered as perfect competition market with many firms that are doing business. a. Find the short run supply curve of the firm? b. The firm is break even at total revenue of $702. Calculate the firm's price and output at this break-even point? c. What is the firm's fixed cost? d. Calculate the price at which firm will shut-down its business?arrow_forwardE4 A Firm ís short-run total cost function is: T C = 4q2 - 2q + 7 The Firm sells in a perfectly competitive market and the ruling price is p = 50 (a) Find the output level that maximizes profits. Show you have a maximum. (b) Find the output level that minimizes average cost, AC. Show you have a minimum. (c) Sketch the graphs of total cost and total revenue with the same axes (d) Sketch the graph of the profit function.arrow_forward
- Please do fast asap.arrow_forwards 1, 12 & 13 Assignment Saved Help Save & Exit Assume a purely competitive increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will Multiple Choice leave the industry, price will fall, and quantity produced will rise. enter the industry and price and quantity will both rise. leave the industry and price and quantity will both rise. leave the industry, price will fall, and quantity produced will fall.arrow_forwardP P₂ B C Q₂ D MC Firm entry occurs. Output Quantity Refer to the above figures for the typical firm in a competitive market. If the market demand curve is D3, what happens in the long run? A Firm exit occurs. ATC Most firms do nothing. D₂ Some existing firms increase capital input. D₂ D₁ Quantityarrow_forward
- 39) If a perfectly competitive firm operates in the short run but exits the industry in the long run, then the firm's short run condition isA) TR > TVC and TR < TC. B) TR > TC.C) TR < TVC. D) TR < TFC.arrow_forwardThe marginal revenue received by a firm in a perfectly competitive market: A) is greater than the market price. B) is less than the market price. C) is equal to its average revenue. D) increases with the quantity of output sold. E) decreases with the quantity of output sold. Q.2 If price is currently between average variable cost and average total cost, then in the short run a perfectly competitive firm should: A) shut down. B) continue to produce to minimize losses. C) raise price. D) increase production to increase profit. E) reduce production to increase profit. Q.3 Lilly is the price-taking owner of an apple orchard. Currently the price of apples is high enough that Lilly is earning positive economic profits. In the long run, Lilly should expect: A) lower apple prices due to entry of new firms. B) higher apple prices due to exit of existing firms. C) lower apple prices due to exit of existing firms. D) higher apple prices due to entry of new firms. E) no change in apple…arrow_forwardMarginal revenue is A) the change in total revenue from a one-unit increase in the quantity sold. B) less than price for a perfectly competitive firm. C) another name for total revenue. D) the economic profit from producing an additional unit of output. E) the change in total cost from producing an additional unit of output.arrow_forward
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