Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 8, Problem 12SQ
To determine
The profit of the firm producing below
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Students have asked these similar questions
A profit-maximizing firm in a competitive market is currently producing 500 units of output. It has
average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b.
What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more
than, less than, or exactly 100 units?
Which of the following will cause the purely competitive firm to stop operations?
A. the price can no longer cover the variable cost
B. the price can cover the variable cost and half of the fixed cost
C. the price can cover both the variable and the fixed costs but there is no economic profit
D. the firm is realizing economic profit
E. no correct answer
In the short run, a perfectly competitive firm can
Select one:
a.
earn an economic profit.
b.
earn an economic profit, earn a normal profit, or incur an economic loss.
c.
earn a normal profit.
d.
incur an economic loss.
Chapter 8 Solutions
Micro Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
Knowledge Booster
Similar questions
- If a firm in a perfectly competitive industry experiences persistent losses, in the long run it should A. exit the industry. B. continue to operate if it can raise the demand for its product through advertising and quality improvements. C. shut down temporarily and wait for market conditions to change. D. raise its price to cover average total cost.arrow_forwardIn the short run, a perfectly competitive firm: a . is in equilibrium only when its economic profit is zero . b . might incur an economic loss. c will always make an economic profit . d . chooses its optimal plant size .arrow_forwardIn the short run, a perfectly competitive firm A : might not make an economic profit. b. will always make an economic profit C. chooses its optimal plant size . d . is in equilibrium only when its economic profit is zero .arrow_forward
- Refer to the figure above for the perfectly competitive firm. If the market price is $300, the firm will have: a. normal profit b. economic profits c. economic losses but will continue to operate in the short run d. economic losses and will shut down in the short run e. none of the abovearrow_forwardWhen can firms decide to shutdown the business? a. When average fixed cost is greater than total revenue b. When average variable cost is greater than the marginal revenue c. When the price does not cover average variable cost d. When marginal revenue is decreasing Firms experience a break even point when a. Total revenue is greater than total cost b. Marginal cost os equal to marginal revenue c. Average fixed cost is equal to average variable cost d. Marginal revenue is zeroarrow_forwardAt what point should firms shut down in the short run? a. when marginal revenue equals marginal costs b. when average revenue is below average costs c. when average revenue is above average total cost d. when average revenue is below average variable costsarrow_forward
- 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?arrow_forwardShow all the work clear handwriting Suppose the market price of a good is $20 and TC=0.5Q2. A. What Q should a profit maximizing perfectly competitive firm choose? B. What are profits? C. Draw a graph that shows the short run choice of Q, revenue and profits.arrow_forwardUse the graph above for question one assuming it represents the cost of a perfectly competitive firm where the market price is eight dollars A. calculate the profit maximizing point a production B. calculate the total revenue C. calculate the total cost D. calculate the total profit and E. will this firm shut down or continue in the short run explain how you knowarrow_forward
- a. Calculate profit for each quantity. How much should the firm produce to maximize profut ? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at ) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?arrow_forwardIn a perfectly competitive market for widgets, the market price is R15. Cost information for a firm producing widgets in this market is given in the table below. Use this information to answer Question 1. Quantity Total Fixed Cost 10 Total Variable Cost 35 70 10 10 105 140 175 7 10 8 10 1. This firm should... A. break even. B. shut down. C. expand production. D. minimise losses by producing 1 widget. E. maximise profits by producing 8 widgets.arrow_forwardQ. In a perfectly competitive industry, a. Firms earn a breakeven profit in the short-run, but can either make an economic profit or make a loss in the long-run b. None of the above c. Firms can choose whether to produce or shut-down in the short-run d. Firms always charge a price equal to the minimum of AVC in the short-run e. There are high “sunk costs” involved which act as a barrier to entry in this industryarrow_forward
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