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 13.1, Problem 3QQ
To determine
Price and average total cost .
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Using the graph for the questions :
A. There are fixed costs of $50 no matter what the output level is. Fill in the fixed cost column
B. Fill in the total costs column
C. Fill in the marginal costs column
D. This is a perfectly compatible firm . The market price for the output they produce is $40/ unit of output. Fill in the marginal revenue column
E. Fill in the total revenue column
F. Fill in the profit column
G. What is the profit maximizing level of output
multiple choice
Assume that the tuna fishing industry is perfectly competitive. Which of the following best characterizes the industry if, as demand for tuna increases, fishing boats have to go farther into the ocean to harvest tuna?
1- a constant-cost industry
2- a fixed-cost industry
3- a decreasing-cost industry
4- an increasing-cost industry
Please answer all
1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred
Group of answer choices
a. Sunk costs
b. Average costs
c. Opportunity costs
d. Marginal costs
2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month?
Group of answer choices
a. Potential buyers will lose buying power at the dealer
b. It may sell the remaining cars at huge discounts to hit the quota
c. It creates an incentive to sell cars from different manufacturers
d. It would ruin the relationship between dealer and manufacturer…
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- Which of the following is not a characteristic of perfect competition? a. Absence of economies of scale for individual producers. b. Easy entry into the industry. c. A large number of firms advertising extensively in an attempt to increase market share. d. No product promotion strategy for individual firms e. Standardized productsarrow_forwardImagine you own a company STR LLC. You produce homogenous and easily available goods. Explain the type of market you are operating in. Elaborate your pricing strategy where you can earn normal profits. You have to show production costs and revenue in a table at what production levels you manage to earn profits or otherwise make losses. References: • Makowski, L., & Ostroy, J. M. (2001). Perfect Competition and the Creativity of the Market. Journal of economic literature, 39(2), 479-535. Kaldor, N. (1935). Market imperfection and excess capacity. Economica, 2(5), 33-50.arrow_forwardThe purely competitive firm in the above exhibit should a. shut down b. produce 5 units of output c. produce 10 units of output d. produce 12 units of output e. produce 20 units of output 6. At the profit-maximizing/loss-minimizing level of output, what is the firm’s profit or loss? Based on this situation, what do you recommend for the firm and why?arrow_forward
- Identify an industry that enjoys perfect (or nearly perfect) competition. How do the competitors interact with each other and suppliers and customers?arrow_forwardMultiple choice questions - Microeconomics 37)In a market that allows free entry and exit, when does the process of entry and exit end for the typical firm in the market? A. when average revenue exceeds marginal cost B. when total revenue is equal to average total cost C. when accounting profit is zero D. when economic profit is zero 36)arrow_forward1. A) What are the underlying assumptions associated with Perfect Competition? B) Explain why firms operating under Perfect Competition make normal economic profit in the long-run. C) Explain why Perfect Competition results in Allocative Efficiency. D)Explain why Perfect Competition results in Economic Efficiency.arrow_forward
- i. Calculate the marginal cost, marginal revenue and profit for each unit of production. ii. How many units should the firm produce to maximise profit?arrow_forwardPerfect Competition MC - Marginal Cost MR - Marginal Revenue ATC - Average Total Cost Refer to the figure above. If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price, the firm's total revenue will be: $240 $90 $60 $180arrow_forwardIdentify the strategy with respect to product/market grid and explain. a. Knoor noodles now available in Rs. 20 pack. (Smaller than normal size) b. Baskin Robins (an international ice cream chain) offered new flavor. c. Mothercare baby product firm started California pizza business.arrow_forward
- Q5 Which of the following characteristics is NOT typically associated with imperfectly competitive market structures? a. Each firm faces a horizontal demand curve for its product. b. Products are differentiated. c. Each firm faces a downward-sloping demand curve. d. Firms engage in non-price competition. e. Firms can shift the demand curve for their product by advertising. Clear my choicearrow_forwardPlease no written by hand solutions What is perfect competition? a. All of the other choices for this question (except for None of the other choices. . .) b. A market where producers try to emphasize the differences in their products. c. A market in which firms try to undercut each other's prices on a consistent basis. d. None of the other choices for this question e. A market in which all buyers and sellers are price-takers. f. A market in which the sellers are all price-makers.arrow_forwardIn perfect competition, the price of the product is determined where the industry Select one: a. supply curve and industry demand curve intersect. b. elasticity of supply equals the industry elasticity of demand. c. average variable cost equals the industry average total cost. d. fixed cost is zero.arrow_forward
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