Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 26, Problem 5E
To determine
To explain:
The market structure in which the given firm operates and the reasons for it. Also, compare the long run
Whether the
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- A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions are able to increase wages for workers?arrow_forwardSince a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?arrow_forwardWhat price will a perfectly competitive firm end up charging up the long run? Why?arrow_forward
- 18 Market Representative Firm MC i of A a $7 MR = P ATC b $5 AVC $2 D1 18,000 70 100 115 Quantity (Q) Output (Q) The diagram above shows a Perfectly Competitive market on the left, and a representative firm supplying in that market on the right. In the long run we would expect the market and the Price to Select one: a. existing firms to exit; increase b. new firms to enter; increase С. new firms to enter; decrease d. existing firms to exit; decrease Price $$$arrow_forwardThe let graph shows the world market for wheat. The right graph shows the cost curves and the marginal revenue curve of an individual wheat farmer at the initial long-run equilibrium The world population increases. In the left graph, draw the new demand curve. Label it Draw the market supply curve that returns the wheat market to its long-run equilibrium. Label it Draw a point to show the new long-run equilibrium price and quantity In the right graph, draw a point to show the firm's price and quantity in the long run >>>Draw only the objects specified in the question 16 124 Price (dollars per bushel) 10 P₁ 05 10 15 20 25 30 35 40 Quantity (bons of bushels per year) C Price and cost (dollars per bushel) 20 MC 10 ATC 124 M 10 MAR 200 650 100 150 200 250 300 350 400 Quantity (thousands of bushels per year) 0 a 3arrow_forwardUse the graph below of a perfectly competitive firm to answer these questions and assume that the industry price is $P4 Price P₂ aaaa P₁ MC AVC ATC Q₁Q₂ Q3 Q4 Quantity 1. At an industry price of P4, what is the profit mazimizing level of output and what type of profit/loss is the firm earning 2. If there is a decrease in industry demand causig the industry price to fall to P2, what is the profit maximizing level output, pr position of the firm or is this firm producing in the short run? 3. What industry price represents the long run profit position for the firm?arrow_forward
- The following diagrams show the market for a good, as well as the cost curves for an individual firm in the market. Assume that all firms are identical. The diagrams show a short run equilibrium, and in the long run the demand curve will shift right. Individual Firm Market MC ATC D. Select one: O True O Falsearrow_forwardHow a firm respond to economy profits and economy losses in perfectly competitive market?arrow_forwardion 5 of 20 The accompanying graph depicts the Marginal Cost (MC), Average Cost (AC), Marginal Revenue (MR), and Demand (D) curves for a competitive firm. 20 MC a. Move point E to the profit maximiznig price and quantity on the graph. 18 AC 16 b. What price should this firm charge to maximize profit? 14 12 D= MR 10 Profit-maximizing price: $ 6 4 c. How many units should this firm produce to maximize 2 profit? 2 4 6 8 10 12 14 16 18 20 Quantity Profit-maximizing output: units Price, MR, MC ($)arrow_forward
- Calculate the amount of profit or loss made by this firm at the equilibrium output. State the type of profit.arrow_forwardDiscuss the long-term effects in a perfectly competitive market if an existing firm is making profits or losses. Use graphs to explain your explanations.arrow_forwardK Matt's Family Photos is a photographic portrait business in a perfectly competitive market in Duluth. The table shows Matt's total costs. In the long run, what is the price of a portrait and how many portraits does Matt sell an hour? What is Matt's economic profit in the long run? In long-run equilibrium, the price of a portrait is $ >>> Answer to 2 decimal places. In long-run equilibrium, Matt sells portraits an hour. In long-run equilibrium, Matt's economic profit is $ an hour. --- Quantity (portraits per hour) 0 123456 Total cost (dollars per hour) 90 140 170 210 260 320 390arrow_forward
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