Suppose a perfectly competitive firm can produce10000 bushels of corn a year at an output at which marginal revenue is equal to marginal cost. The market price of corn per bushel is $2. The firm's total costs per year are $30000 and fixed costs per year are $15000. Show and explain which of the following is true: In the short run, this firm should a) Produce 20000 bushels to try to increase economic profit. b) Produce 10000 bushels of corn because, although they are losing money, they are losing less than if they shut down.         c)Shut down.         d) Continue producing until the price of corn increases

Suppose that a perfectly competitive firm's marginal revenue equals $12 when it sells 10 units of output. If the marginal cost of producing the 10th unit is $14, to maximize its profit the firm should A) decrease its production. B) shut down. C) increase its production. D) increase the price it charges for its product. E) do nothing because it is already maximizing its profit.

The graph below gives marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a firm. Note that marginal revenue (MR) is not shown. Suppose the firm operates in a perfectly competitive market and acts to maximize its profit. which of the following is/are true? I. At a price of 1.5, the firm will shut down in the short-run. II. At a price of 0.5, the firm will shut down in the short-run. III. At a price of 2.5, the firm will make a positive economic profit. 7 MC АТС AVC 3 2 1 1 Quantity 2. 4. Price

Suppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $30.00 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) At this level of output, profit will be $. (Enter your response rounded to the nearest dollar.) Peach growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal place.) Price (dollars per box) 40- 36- 32- 28- 24 20 16- 12- 8 4- 10 MC 20 30 40 50 60 70 80 Output (boxes of peaches per day) ▬▬ ATC 90 100 Q

Suppose you supply good X in a perfectly competitive market. To sell good X you rent a building for $30,000 per month and rent a machine for $20,000 per month. Those are your fixed costs. The variable cost per month is given in the table below: Quantity of good X Variable Cost (VC) Average Variable Cost (AVC) Average Total Cost (ATC) Marginal Cost (MC) 0 $0       1,000 $5,000       2,000 $8,000       3,000 $9,000       4,000 $14,000       5,000 $20,000       6,000 $33,000       7,000 $49,000       8,000 $72,000       9,000 $99,000       10,000 $150,000         a) Use blank spaces in the table above to calculate your average variable cost, average total cost, and marginal cost for each quantity of good X. b) There is free entry into this market, and anyone who enters will face the same costs as you do. If current market price of one unit of…

The wheat industry is comprised of many firms producing an identical product. Market demand and supply conditions are indicated in the left-hand panel of the figure attached; the long-run cost curves of a wheat farmer are shown in the right-hand panel. Currently, the market price for wheat is $2 per pound, and at that price, consumers are purchasing 800,000 pounds of wheat per day.   Using the graphs attached, answer the following:   a. How many pounds of wheat will each farmer produce if they want to maximize profits? b. How many farmers are currently serving the industry (fractional numbers are fine)? c. In the long run, what will the equilibrium price of wheat be? Briefly explain your answer.

The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost.   The price of fertilizer must be equal to average variable cost.   The price of fertilizer must be less than marginal cost.       Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. Average total cost will decrease.   The quantity supplied by each firm will decrease.   The total quantity supplied to the market will decrease.   Marginal cost will decrease.   The price of fertilizer will increase.

Firms in the market for dog food are selling in a purely competitive market. A firm producing dog food has an output of 10,000 pounds of dog food, for which it sells for $0.50 a pound. At the output level of 10,000 pounds the average variable cost is $0.40, the average total cost is $0.70, and the marginal cost is $0.50.       (a) What would you expect the firm to do in the short run? Explain.

Suppose the market for apples is perfectly competitive. The short-run average total cost and marginal cost of growing apples for an individual grower are illustrated in the figure to the right. 40- 36 Assume that the market price for apples is $26.00 per box. What is the profit-maximizing quantity for apple growers to produce? 75 boxes. (Enter your response as an integer.) 32 MC 28 At this level of output, profit will be S 900. (Enter your response rounded to the nearest dollar.) Apple growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal 20- place.) ATO 12- 20 30 40 so 80 70 ao 90 100 Output (boxes of apples per day) (xoq jəd sejop) so

A perfectly competitive firm produces the level of output at which MR=MC on the rising portion of the firm’s marginal cost curve. At that output level, it has the following costs and revenues:             TC = $830,000             VC = $525,000             TR = $428,000   Given that the firm produces the level of output at which MR=MC, calculate the amount of profit (loss) this firm earns. is it Profit=TR-TC?