Q: Assume that a firm in a competitive market faces the following cost information. If the market price…
A: PLEASE FIND THE ANSWER BELOW.
Q: Why should a firm shut down if its average variable cost curve is above the price of their product?
A: If the price of the product is below the average variable cost (AVC), then the firm will shutdown.…
Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…
A: A market will be perfectly competitive when a larger group of suppliers serve identical or…
Q: Explain the fact that the short-run supply curve for a price taking firm is that segment of its…
A: The individual supply curve of short-run is the marginal cost of an individual at all of the points…
Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…
A: Shutdown point is a point of production where a firm decides not to continue production as producing…
Q: Illustrate and explain how the short-run supply curve of a price-taking firm is determined.
A: In a price taking firm, the demand curve is a straight line parallel to x axis which is equal to…
Q: Under a PCM, the long run equilibrium situation is that, Economic profit is equal to zero. Is this…
A: Under perfect competition market,Firms are price taker.Therefore whatever price is set by…
Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…
A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…
Q: Explain why a long-run supply curve might slope upward.
A: The supply curve indicates the relationship between price and quantity supplied by the firms.
Q: The market for drones is perfectly competitive. Assume for simplicity that fractions of everything,…
A: Marginal cost is the cost incurred when an additional unit of output is produced by the firm. In…
Q: Would a perfectly competitive firm produce if price were less than the minimum level of average…
A: No, a perfectly competitive firm would not produce if price were less than the minimum level of…
Q: What is the value of the average cost? If the price in the market of the perfect competitive firm…
A: Profit maximizing quantity is where marginal revenue equals marginal cost.
Q: The cost function for Acme Laundry is: TC(q)=10+10q+q^2 so its marginal cost function is:…
A: The cost function measures the minimum cost of manufacturing a given level of output for a few fixed…
Q: Why would a firm that incurs losses choose to produce rather than shut down
A: Shut down point refers to the point where the firm stops its production process. It is the point…
Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?
A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…
Q: Firms in an industry have the following cost function: C(q)=3q3-6q2+4q. If the market is perfectly…
A: C = 3q3 - 6q2 + 4q Divide C w.r.t q to get AC => AC = (C / q) => AC = 3q2 - 6q + 4…
Q: Jackson Hardware, a firm in the perfectly competitive custom hardware industry, asks you for your…
A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…
Q: 4. A profit-maximizing firm has cost function C(Q) = 500 + 10Q + 200?. 4a.What is the firm's…
A: Marginal cost is the cost incurred when one additional unit of output is generated.
Q: Explain how market competition affect the mark –up in price setting and the fraction of the marginal…
A: If there is market competition then setting mark-up price will be affected a lot. Let's understand…
Q: Under what conditions would a firm decide to shut down in the short run but remain invested in the…
A: In a market, a firm faces different situations in short-run and long-run due to which it makes…
Q: Describe how firms in Perfect Competition achieve both allocative and productive efficiency and thei…
A: There are two situations that arise in a perfectly competitive market, one is short-run equilibrium…
Q: Consider a firm that has no fixed costs and that is currently losing money. Are there any situations…
A: If a firm has no fixed cost, the total cost of a firm is equal to the total variable cost, and…
Q: In the short run, if a firm is having economic losses, but the profit is greater than the average…
A: The following problem has been solved as follows:
Q: MC ATC AVC -MR K STV Given the above graph, the competitive firm's short-run supply curve is the:
A: In a perfectly competitive market, the short run supply curve is that the incremental cost (MC)…
Q: In the long-run equilibrium of a competitive market with identical firms, what are the relationships…
A: please find the answer below.
Q: Draw a long-run supply curve for a competitive market with identicalfirms, and describe its…
A: The long‐run market supply curve is found by examining the responsiveness of short‐run market supply…
Q: A price taking firm has zero fixed cost and increasing marginal cost. What quantity does it produce?…
A: A price-taking firm is such a firm that accepts the market price. A market price is a price that is…
Q: Does a competitive firm’s price equal the minimumof its average total cost in the short run, in the…
A: A perfect competition(PC) market is one with many consumers and sellers producing identical…
Q: “That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost…
A:
Q: 'In the short run, the firm should shut down only if the price is less than average variable cost''…
A: This statement is absolutely correct.
Q: A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The…
A:
Q: What is the formula for profit maximization by firm ? Why does this result in the marginal cost…
A: The profit for a firm can be calculated by subtracting the total cost (TC) from the total revenue…
Q: If the firms in a market have accounting profits that are larger than their implicit costs, then, in…
A: Answer: If the firm has accounting profit larger than the explicit cost it means the firm is earning…
Q: In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?
A: When the firms earn economic profit in the short run, new firms will enter in the market cause…
“The firm’s entire marginal cost curve is its short-run supply curve.” Is the preceding statement true or false? Why?
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- What is the value of the average cost? If the price in the market of the perfect competitive firm is P9 Equilibrium quantity would be? Why?Why will a firm never plan to supply an output at which it has increasing returns to scale?The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5
- What is the relationship between marginal cost and the short-run supply curve for the purely competitive firm?What happens to a competitive firm whose cost function exhibits decreasing marginal cost everywhere? Construct a concrete cost function of this type and carry out the search for the profit-maximizing output.For each of the following events identify which of the determinates of demand or supply are affected. Also indicate whether demand or supply is increased or decreased. Why? A stock market crash lowers people’s wealth. Batelco increases the prices of mobile services. Diminishing returns mean rising costs while economies of scale mean falling costs. Therefore, a firm cannot be facing both diminishing returns and economies of scale. Do you agree? Why or why not?
- At what output rate does the firm maximize profit or minimize loss?Explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal cost is on the rise. People often believe that large firms in an industry have cost advantages over small firms in the same industry. For example, they might think a big oil company has a cost advantage over a small oil company. For this to be true, what condition must exist? Explain your answer.Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm’s total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per instant pot) (Instant pots) (Dollars) (Dollars) (Dollars) (Dollars) 25.00 1,600,000 70.00 1,600,000 100.00 1,600,000
- Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm’s total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per instant pot) (Instant pots) (Dollars) (Dollars) (Dollars) (Dollars) 25.00 1,600,000 70.00 1,600,000 100.00 1,600,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $1,600,000 per day. In other words, if it shuts down, the firm would suffer losses of $1,600,000 per day until its fixed…Would a cost function of 0 mean a linear line of supply curve? For example if 10 firms are on the market selling 10 goods and the cost function is 0?The cost function for Acme Laundry is C(q) = 50 + 30q +q?, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p? The output level at which the firm's profit is maximized as a function of p is q =|- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the / character.) If p= 60, then Acme Laundry should produce| units. (Enter your response as a whole number.)