Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 6RQ
Subpart (a):
To determine
Relevance of perfect competition .
Subpart (b):
To determine
Relevance of perfect competition.
Subpart (c):
To determine
Relevance of perfect competition.
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Students have asked these similar questions
In a perfectly competitive market, each firm has a long-run total cost given by LTC = 100Q - 10Q² +
1/2Q³. What is the market's long-run equilibrium price?
00
O 50
O25
150
4
Price and costs (dollars)
20
10 L
O
10
20
MC
O always.
ATC
MR
40
30
Quantity (per day)
The figure above shows a perfectly competitive firm. In the short run, the firm will shut down
only if the AVC of producing 10 units is more than $20.
only if the AVC curve reaches its minimum before 10 units are produced.
only if the AVC of producing 10 units is less than $20.
Stuff, Incorporated is a firm with a total revenue of $1,000, marginal cost of $5, and average variable cost of $4. Both the output and input markets are
perfectly competitive and Stuff, Inc. is in long run equilibrium. Stuff, Inc.'s output and total fixed costs must be equal to which of the following?
O Output 200; Fixed Cost $200
O Output 200; Fixed Cost $400
O Output 200; Fixed Cost $800
O Output 250; Fixed Cost $800
O Output 250; Fixed Cost $400
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- Suppose that the pen-making industry is perfectly competitive. Also suppose that each current firm and any potential firms that might enter the industry all have identical cost curves, with minimum ATC = $1.25 per pen. If the market equilibrium price of pens is currently $1.50, what would you expect it to be in the long run? LO11.2 a. $0.25. b. $1.00. c. $1.25. d. $1.50.arrow_forwardA firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firm’s ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10 percent, then how big will each firm’s accounting profit per unit be?arrow_forwardThe following figure shows the revenue and cost curves for a firm X. RM 10 a. b. C. 7 6 LO 5 4 3.5 0 20 25 30 MC 40 AVC AC AR=MR Units If a firm X achieves productivity efficiency, what will be the total revenuel generated At what price will a firm stop operating? Please explain. If the market price is RM4.00, what is the total profit or total loss.arrow_forward
- ........ # m SI 4. 2. He %3D Consider the following costs for a typical perfectly competitive firm with no fixed costs (average total cost = average variable cost). Average Total Cost Quantity Marginal Cost $24 1. 16.5 6$ 12.67 3. 7. 15 11.25 12 5. 14.83 9. a. Which of the following prices would be associated with a long-run equilibrium? O $11.25 O $15 O $12 Next> < Prev 9 jo 9 72°F Partly sunny 近 ere to search ofile Ball10 F7 F3 & %23 24 4. 2. R. K H B.arrow_forwardConsider 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 (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 18, 80 80 72 64 56 ATC 48 40 32 24 16 AVC 8 + MC O 3 12 15 18 21 24 27 30 QUANTITY OF OUTPUT (Thousands of pounds) COSTS (Dollars per pound)arrow_forwardRevenue and cost (dollars per unit) 50 40 30 20 20 10 O 10 20 30 MC ATC 40 50 e figure above shows a perfectly competitive firm. If the market price is $20 per unit, then the firm produces A. 30, more than $100 B. 30; zero because the firm earns a normal profit C. 20; less than $400 DD. more than 30; more than $100 DE. 0; zero because the firm earns a normal profit Output (units per day) units and has an economic profit that is,arrow_forward
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