The figure to the right represents the cost structure for a perfectly competitivefirm with its average total cost (ATC) curve, average variable (AVC) curve, andmarginal cost (MC) curve.MC17.00..Suppose the market price is $17.00 per unit. Will firms enter or exit the industryin the long run?ATCIf markot price is $17.00, then firms willthe market in theAVClong run.What effect will firms entering have on the market price?When firms enter,O A. market demand will decrease, decreasing price.B. the marginal cost of production will increase, increasing price.OC. the average total cost of production will increase, increasing price.O D. market supply will increase, decreasing price.QuantityPrice and cost

In a competitive firm there are large number of firms selling identical products thus having no…

The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve. MC Suppose the market price is $17.00 per unit. Will firms enter or exit the industry in the long run? 17.00 ATC If market price is $17.00, then firms will the market in the long run. AVC What effect will firms entering have on the market price? When firms enter, A. market demand will decrease, decreasing price. B. the marginal cost of production will increase, increasing price. O C. the average total cost of production will increase, increasing price. D. market supply will increase, decreasing price. Quantity Price and cost

The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve. MC Suppose the market price is $17.00 per unit. Will firms enter or exit the industry in the long run? 17.00 ATC If market price is $17.00, then firms will the market in the long run. AVC What effect will firms entering have on the market price? When firms enter, A. market demand will decrease, decreasing price. B. the marginal cost of production will increase, increasing price. O C. the average total cost of production will increase, increasing price. D. market supply will increase, decreasing price. Quantity Price and cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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M10
Use the following information to answer Questions 1 and 2. The perfectly competitive market for kitchen knives is at a short-run equilibrium with P = $89 and Q = 8370. Firms in the industry are perfectly competitive, with 9° – 5q? + 17q+550. 1. What is the profit-maximizing level of output for each firm in the short run? Your answer should contain only numbers.
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
The following graph illustrates the demand and marginal revenue curve (D-MR) of a perfectly competitive firm. Suppose that when the firm produces 40 units, its average variable cost equals $65 per unit and its average total cost equals $80 per unit. Use the green rectangle (triangle symbols) to plot the total cost of producing 40 units. Next, use the grey rectangle (star symbols) to plot the total variable cost of producing 40 units. Then, use the tan rectangle (dash symbols) to plot the total revenue at 40 units. Finally, use the purple rectangle (diamond symbols) to plot the profit or loss at 40 units. PRICE AND COST (Dollars) 100 90 80 70 60 50 40 30 20 10 0 0 10 + 20 +ATC + AVC 30 40 50 60 QUANTITY (Units) 70 80 D=MR 90 H 100 Total Cost Total Variable Cost I Total Revenue Profit or Loss ?
The graphs suggest that in the long run, assuming no changes in the given information,
Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?
Avocados have been proven to bring many health benefits if consumed regularly. Many others including Gavin are huge fans of avocados and have plans to start a new business selling avocados. Assume the market for avocados to be perfectly competitive. Answer the following questions: a. If these firms are able to continue entering the market for avocados, it is likely that they are earning an economic profit. In order to earn an economic profit, firms must ensure that the price is above its Type ATC for Average Total Cost, AVC for Average Variable Cost, TC for Total Cost or VC for Variable Cost. b. Gavin decided to build an avocado farm in Brisbane. It is estimated that Gavin will need to spend $14.55 thousand on farming equipment costs. Gavin will also need to spend $20.95 thousand on labour and overhead costs. However, it is expected that Gavin will be able to sell 5 tonnes of avocados and gain revenue of $47.66 thousand from selling these avocados. Calculate the thousand. Answer to the…
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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 snapback hats. COSTS (Dollars) 100 100 80 90 80 20 70 70 HD 50 40 30 20 0 11 D 10 O MC Price (Dollars per snapback) 15 15 20 25 55 70 85 201 ATC 0 D AVC O 50 60 70 80 QUANTITY (Thousands of snapbacks) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of snapbacks 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 snapbacks and the profit-maximizing quantity of snapbacks.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. □ Quantity (Snapbacks) BO 100 ▼ On the following graph, use the orange points (square symbol) to…