Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 13, Problem 3CQQ
To determine
The cost curves effects on short run supply curve.
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Students have asked these similar questions
A competitive firm’s short-run supply curve is its_________ cost curve above its _________ costcurve.a. average-total-; marginalb. average-variable-; marginalc. marginal-; average-totald. marginal-; average-variable
If a profit-maximizing, competitive firm is producing a quantity at which marginal cost is between average variable cost and average total cost, it will
A. keep producing in the short run but exit the market in the long run.
B. shut down in the short run but return to production in the long run
C. shut down in the short run and exit the market in the long run.
D. keep producing both in the short run and in the long run.
Price
Average total cost
AVC
Demand
Marginal
cost
Marginal revenue
Q
Quantity
Discuss the firm plotted on the figure. What type of firm do you see?is the firm operating at the optimal point of production? is the firm making a proht? s the firm operating in
the short or in the long run?
Chapter 13 Solutions
Essentials of Economics (MindTap Course List)
Ch. 13.1 - Prob. 1QQCh. 13.2 - How does a competitive firm determine its...Ch. 13.3 - Prob. 3QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQCh. 13 - Prob. 1QR
Ch. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - A firm in a competitive market receives 500 in...Ch. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PACh. 13 - Suppose that each firm in a competitive industry...
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- The apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 per cent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit. In the long run, the ________. Select one: A. increases; zero; price of apples will return to its original level B. increases; zero; orchards will be replanted and economic profit will return to zero C. increases; positive; orchards will be replanted and economic profit will return to zero D. remains the same; zero; orchards will be replanted and growers will make normal profitsarrow_forwardFill in with the correct answer. Your firm has a price of $5, an average total cost of $7, and an average variable cost of $4. Inthe short run, you should__________ (operate/shut down) because ________exceeds___________. Inthe long run, you should ___________(stay in/exit) the market because________ exceeds___________.arrow_forwardJustin’s Jeans sells in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $33 per unit, and the total fixed cost is $30.(a) Identify the profit-maximizing quantity. Explain using marginal analysis. (b) Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show your work.(c) Calculate the average fixed cost of producing 6 units. Show your work.(d) Based on your answer to part (b), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain.(e) Based on your answer to part (b), will the market price increase, decrease, or stay the same in the long run? Explain.(f) The income elasticity of demand for Good M is 1.4, and the cross-price elasticity of demand for jeans with respect to the price of Good M is −0.75. Based on your answer to part (e), what will happen to the demand for jeans? Explain.(g) Now assume that the market in which…arrow_forward
- Please solve Fast i give 2 like Which of the following is not true according to Figure 1? Hide Transcribed Text Figure 1: Cost and Price AC : Average Cost, AVC: Average Variable Cost, and MC: Marginal Cost A) The firm earn a zero economic profit when it produces 40 unit at the price of $5.7 per unit. B) The minimum acceptable price (the shut-down point) is $4.3 per unit. C) The firm's supply curve is its MC curve above minimum of AVC. D) The firm earns an economic profit when the price exceeds $4.3 per unit.arrow_forwardProvide an explanation to the following statements about perfect competition. (a) Firms are price takers. (b) Firms will enter the marker ifp > AT C. (c) Firms will exit the marker ifp < AT C. (d) Firms break-even in the long-run. (e)P= MinLRAT Cin the long-run. (f) The resource allocation is efficient.arrow_forwardBelow is a graphical illustration of a typical firm operating in a monopolistically competitive industry: P5 P4 P3 P2 P1 H Q1 Q2 Q3 Refer to the graph above to answe question. Which of the following statements is correct? ATC Sarrow_forward
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