Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 8, Problem 17RQ
Briefly explain the reason for the shape of a marginal revenue curve for a
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is the shape of the demand curve faced by the perfectly competitive firm? Explain your answer with a diagram.
Goldbar is an energy bar firm selling in a perfectly competitive market but is considering the impacts of changes. Imagine you are a loan agency and Goldbar executives came to you with the following request:
"At Goldbar, we need $100,000, and we will use that money to advertise to increase demand for energy bars."
Thoroughly analyze this quote using economic terms.
Why is the demand curve facing an individual firm in a perfectly competitive market horizontal? Does this mean that consumers do not respond to price changes? Briefly explain.
Suppose that firms operating in a perfectly competitive industry are experiencing positiveprofits (profits > 0). What do we expect to happen to the number of firms in this industry?What will happen to the profits of firms in this industry over the long-term? Explain
Chapter 8 Solutions
Principles of Economics 2e
Ch. 8 - Firms ill a perfectly competitive market are said...Ch. 8 - Would independent trucking fit the characteristics...Ch. 8 - Look at Table 8.13. What would happen to the films...Ch. 8 - Suppose that the market price increases to 6, as...Ch. 8 - Explain in words why a profit-maximizing film will...Ch. 8 - A firms marginal cost curve above the average...Ch. 8 - If new technology in a perfectly competitive...Ch. 8 - A market in perfect competition is in long-run...Ch. 8 - Productive efficiency and allocative efficiency...Ch. 8 - Explain how the profit-maximizing rule of setting...
Ch. 8 - A single firm in a perfectly competitive market is...Ch. 8 - What are the four basic assumptions of perfect...Ch. 8 - What is a price taker firm?Ch. 8 - How does a perfectly competitive firm decide what...Ch. 8 - What prevents a perfectly competitive firm from...Ch. 8 - How does a perfectly competitive film calculate...Ch. 8 - Briefly explain the reason for the shape of a...Ch. 8 - What two rules does a perfectly competitive firm...Ch. 8 - How does the average cost curve help to show...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Should a firm shut down immediately if it is...Ch. 8 - How does the average variable cost curve help a...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Why does entry occur?Ch. 8 - Why does exit occur?Ch. 8 - Do entry and exit occur in the short run, the long...Ch. 8 - What price will a perfectly competitive firm end...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Finding a life partner is a complicated process...Ch. 8 - Can you name five examples of perfectly...Ch. 8 - Your company operates in a perfectly competitive...Ch. 8 - Since a perfectly competitive firm can sell as...Ch. 8 - Many films in the United States file for...Ch. 8 - Why will profits for films in a perfectly...Ch. 8 - Why will losses for firms in a perfectly...Ch. 8 - Assuming that the market for cigarettes is in...Ch. 8 - In the argument for why perfect competition is...Ch. 8 - The AAA Aquarium Co. sells aquariums for 20 each....Ch. 8 - Perfectly competitive firm Doggies Paradise Inc....Ch. 8 - A computer company produces affordable,...
Additional Business Textbook Solutions
Find more solutions based on key concepts
P2-33A Correcting errors in a trial balance
Learnmg Objective 4
Total Deb|ts $123,250
The tr...
Horngren's Accounting (12th Edition)
For each of the following independent situations, place an (X) by the transactions that would be included in th...
Principles of Accounting Volume 1
What information does a SWOT analysis provide managers? What information might it miss?
Principles of Management
What is the best way to control labor costs? What tools are discussed in the chapter that may be used to help c...
Construction Accounting And Financial Management (4th Edition)
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
Define cost object and give three examples.
Cost Accounting (15th Edition)
Knowledge Booster
Similar questions
- How do I know this graph shows a firm that is perfectly competitive? Which curve tells me it is?arrow_forwardGraph the following for a perfectly competitive firm: A graph showing the area of economic profit or lossarrow_forwardCióń 6 óf 20 The graph shows the demand curve (D), average total cost curve (ATC), average variable cost curve (AVC), and the 90 marginal cost curve (MC) for a perfectly (or purely) competitive firm. 80 D = MR Assuming that this firm maximizes profit, what is this firm's 70 profit? 60 ATC 50 AVC ğ 40 - profit: $ 30 MC 10 0 10 20 30 40 50 60 70 80 90 Quantity Price and cost ($) 20arrow_forward
- A competitive firm's supply curve is identical to its marginal cost curve. True or false? Briefly explain.arrow_forwardThe diagram below shows a perfectly competitive firm. What is the economic profit earned or loss incurred by the firm?arrow_forwardConsider the perfectly competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 80 42.5, 60 ATC. 20 AVC 10 MO-O 10 15 20 25 30 35 40 50 QUANTITY (Thousands of shirts) For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indiſferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Shirts) (Dollars per shirt) Produce or Shut Down? Profit or Loss? 10 20 32 40 50 60 On the following graph, use the orange points (square symbol) to plot points along the…arrow_forward
- What two rules does a perfectly competitive firm apply to determine its profit-maximizing quantity of output?arrow_forwardhe following graph summarizes the demand and costs for a firm that operates in a perfectly competitive market. What level of output should this firm produce in the short run? What price should this firm charge in the short run? What is the firm’s total cost at this level of output? What is the firm’s total variable cost at this level of output? What is the firm’s fixed cost at this level of output? What is the firm’s profit if it produces this level of output? What is the firm’s profit if it shuts down? In the long run, should this firm continue to operate or shut down? problem 1-6 are solved, this is subparts.arrow_forwardBriefly explain four assumptions of perfectly competitive marketarrow_forward
- The graph below summarizes the demand and costs for a firm that operates in a perfectly competitive market. Instructions: Use the nearest whole numbers on the graph when calculating numerical responses below. " A graph summarizes the demand and costs for a firm that operates in a perfectly competitive market.""The horizontal axis labeled quantity ranges from 0 to 11 in increments of 1. The vertical axis labeled dollar ranges from 0 to 48 in increments of 4. A horizontal line labeled D-superscript f = M R enters the quadrant through the point (0, 28). An upward-facing curve labeled M C begins at the point (0.5, 20) goes down to the right with decreasing steepness to a low point at (3.5, 8) then goes up to the right with increasing steepness to end at the point (8, 40). A second upward-facing curve labeled A V C begins at the point (0.5, 22) goes down to the right with decreasing steepness to a low point at (5, 12) then goes up to the right with increasing steepness to end at the…arrow_forwardSuppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Larry's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Larry produces. Calculate Larry's marginal revenue and marginal cost for the first seven shirts he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc