Answering all questions compulsory... The graph shows the situation facing Mike's Bikes Inc., a producer of mountain bikes.The demand and costs of other mountain bike producers are similar to those of Mike's Bikes.Is the market for mountain bikes efficient or inefficient in the long run? Explain your answer.Previous questionPrice and cost (dollars per bike)400MO350-ATCThe market for mountain bikes might be efficient in the long run ifA. more firms entered the bike marketB. the loss that arises because the quantity of mountain bikes produced is less than the efficient quantity is offset by the gainthat arises from having a greater degree of product varietyOC. firms exit the bike marketOD. firms invested in technology that increased the total cost of production300-250-200-150-100-50-MR0050100Quantity (mountain bikes per week)150 200250300D

Step 1:As shown in the graph, the firm producing the mountain bikes is competitive. So, it will…

Answered: The graph shows the situation facing…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
Price $3 2 10,000 20,000 30,000 S D Quantity Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. producers should lower the price to $1 in order to sell the quantity demanded of 10,000.
Ariana Grande has just finished recording her latestCD. Her record company’s marketing departmentdetermines that the demand for the CD is asfollows:Price Number of CDs$24 10,00022 20,00020 30,00018 40,00016 50,00014 60,000The company can produce the CD with no fixed costand a variable cost of $5 per CD.a. Find total revenue for quantity equal to 10,000,20,000, and so on. What is the marginal revenuefor each 10,000 increase in the quantity sold?
3. Suppose that ABC company plans to build a subway train to provide better alternatives for Filipino commuters to avoid heavy traffic and delay during rush hour. Apparently, the subway can last up to 50 years only that its cost $ 5.5 million to build it. Assuming that it cost nothing for its maintenance. Consider the table below that shows potential demand of the subway train of the ABC company. For now, disregard the potential variety of the passenger's demographic.
1. Price and output in a competitive price-searcher market Consider a price-searching firm, Sean's Fire Engines, which sells fire engines in the fictional country of Pyrotania. Initially, Sean's produced six fire engines but then decided to increase production to seven fire engines. The following graph shows the demand curve the firm faces. To sell the additional engine, Sean's must lower its price from $100,000 to $50,000 per engine. (Hint: Sean's Fire Engines gains revenue from the additional engine it sells, but it also loses revenue from the initial six engines because it sells them all at the lower price.) On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial six engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. re engine) 250 225 200 Q Search Revenue Lost Col
9. Problems and Applications Q9 The market for apple pies in the city of Ectenia is competitive and has the following demand schedule: Price Demand Schedule Quantity Demanded (Dollars) (Pies) 1 1,200 2 1,100 3 1,000 4 900 Each producer in the market has a fixed cost of $6 and the following marginal cost: Quantity Marginal Cost (Pies) 1 (Dollars) 10 1382 23456 14 Complete the following table by computing the total cost and average total cost for each quantity produced. Quantity Total Cost Average Total Cost (Pies) 1 2 3 4 5 6 (Dollars) The price of a pie is now $11. At a price of $11, are (Dollars) pies are sold in the market. Each producer makes producers in this market, each making a profit of $ pies, so there
13. Firms in Competitive Markets 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 greater than average total cost. The price of fertilizer must be greater than marginal cost. The price of fertilizer must be greater than average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Price and Costs MC Firm ATC AVC Quantity Price No U 1 Demand If firms in the market are producing output but are currently making economic losses, market and indicates the corresponding supply curve Market Quantity 52 S illustrates the present situation for the typical firm in the
6. A-One bakery in Brampton sells 350 fruit cakes slices each month for $3.25 each. They are looking for help to come up with a strategy to increase revenue. A student from our school who works their part time conducts a survey. The results of the survey indicate that sales of the fruit cake slices would increase by 80 per month for each $0.10 decrease in price. c. Determine the marginal revenue from the sales of 200 slices of fruit cake. d. The cost of producing x fruit cake slices is C(x) = -0.0005x² + 1.5x + 300. Determine the marginal cost of producing 200 fruit cake slices.
PRICE (Yen per gram) 100 90 80 70 60 40 30 20 10 0 0 0 Demand + 20 40 60 80 100 120 140 160 180 200 QUANTITY (grams of uff per month) Graph Input Tool Demand for Uff Price of Uff (Yen per gram) to eat my uff this morning, but there wasn't any Quantity Demanded DEMAND SHIFTERS Average Income -(Yen per month) Price of Tulg (Yen per gram) Price of Snick (Yen per gram) Of Suppose that the price of a gram of uff decreased from 50 yen to 40 yen. This would cause a an increase in 50 100 100 20 50 Plug any value lower than the current number into the Average Income box. A decrease in average income causes a leftward the demand curve. the demand curve and therefore When the prices of tulg or snick change, there is a shift of the demand curve for uff. The directions of these changes imply that snick and uff are , and that tulg and uff are . For example, a Hermetian might say, "I went in my fridge. So instead of having uff for breakfast, I ate some
The market for apple pies in the city of Ectenia iscompetitive and has the following demand schedule:Price Quantity Demanded$1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0Each producer in the market has fixed costs of $9 andthe following marginal cost schedule:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost andaverage total cost for each quantity from 1 to6 pies.b. The price of a pie is now $11. How many pies aresold? How many pies does each producer make?How many producers are there? How much profitdoes each producer earn?c. Is the situation described in part (b) a long-runequilibrium? Why or why not?d. Suppose that in the long run there is free entryand exit. How much profit does each producerearn in the long-run equilibrium? What isthe market price? How many pies does eachproducer make? How many pies are sold inthe market? How many pie producers areoperating?
explain your answers in detail and use graphs whenever appropriate: The market for rental cars is very competitive. How would the following developments affect the quantity of car rentals that a typical rental car company wants to supply in the short run? a. With the easing of fears about Covid 19, people are more excited to travel than before. b. Local governments reduce the yearly fee that rental car companies have to pay for their facilities. Note, these fees do not vary with how many cars the company rents. c. Rental car companies have to pay higher wages for their workers. Suppose that initially the market for rental cars is in long-run equilibrium. a. What does the fall in the yearly fee rental car companies have to pay for their facilities do to the profits of a typical rental car company in the short run? b. What will happen to the equilibrium price and quantity of rental cars in the long run? Why? What will happen to the profits of a typical rental car company in the long run?
Look at Table 8.13. What would happen to the films profits if the market price increases to 6 per pack of raspberries?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

SEE MORE TEXTBOOKS