EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 6RQ
To determine
Put out the reasons for the firm necessarily following the two given conditions, in order to treat the price of the produce as given. And also explain the situation where the firm follows one condition and not the other.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per block of tofu and quantity of 25 million blocks per
year. Suppose a top medical journal publishes research that animal-alternative protein sources such as tofu could increase your expected lifespan by 4
years.
The publication is expected to cause consumers to demand
tofu at every price. In the short run, firms will respond by
Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication.
PRICE (Dollars per block)
2
1
Supply
Demand
Demand
0
05
10
15 20
25 30 35
40
45
50
QUANTITY (Millions of blocks)
In the long run, some firms will respond by
Supply
until
Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long-
run equilibrium after firms and consumers finish adjusting to the news.
PRICE (Dollars per block)
2
10
9
Supply…
Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 75 million
pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could decrease your
expected lifespan by 5 years.
The publication is expected to cause consumers to demand
jackfruit at every price. In the short run, firms will respond by
Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication.
2
1
10
9
8
Supply
Demand
0
0
+
15
30
45 60 75 90 105 120 135 150
QUANTITY (Millions of pounds)
In the long run, some firms will respond by
+ 1 }
Demand
Supply
until
Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long-
run equilibrium after firms and consumers finish adjusting to the news.
2
1
10
9
Supply
Demand
B…
Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 100 million
pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase your
expected lifespan by 5 years.
The publication is expected to cause consumers to demand jackfruit at every price. In the short run, firms will respond by
Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication.
PRICE (Dollars per pound)
10
9
8
7
65
-run effects of a shift in demand
2
0
0 20
40
Supply
Demand
60
80 100 120 140
QUANTITY (Millions of pounds)
160 180
200
O
Demand
Supply
?
t.
Chapter 8 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 8.3 - Prob. 1MQCh. 8.3 - Prob. 2MQCh. 8.3 - Prob. 1.1MQCh. 8.3 - Prob. 2.1MQCh. 8.4 - Prob. 1TTACh. 8.4 - Prob. 2TTACh. 8.4 - Prob. 1MQCh. 8.4 - Prob. 2MQCh. 8.5 - Prob. 1TTACh. 8.5 - Prob. 2TTA
Ch. 8.5 - Prob. 1.1TTACh. 8.5 - Prob. 2.1TTACh. 8.5 - Prob. 1MQCh. 8.5 - Prob. 2MQCh. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10P
Knowledge Booster
Similar questions
- The following graph plots the market demand curve for rhenium. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. PRICE (Dollars per pound) 80 72 64 56 48 40 32 24 16 8 0 Demand 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Because you know that competitive firms earn Supply (10 firms) Supply (20 firms) True 4 If there were 30 firms in this market, the short-run equilibrium price of rhenium would be s would Therefore, in the long run, firms would O False Supply (30 firms) per pound. From the graph, you can…arrow_forwardSuppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 250 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could increase your expected lifespan by 4 years. The publication is expected to cause consumers to demand seitan at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. PRICE (Dollars per pound) 10 9 8 पं 2 1 0 Supply Demand 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pounds) Demand O Supplyarrow_forwardSuppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 175 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could increase your expected lifespan by 5 years. The publication is expected to cause consumers to demand (less/more) seitan at every price. In the short run, firms will respond by ( attached image). Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication In the long run, some firms will respond by (attached image) until (consumer demand returns to original level, each firm in the industry is once again earning zero profit, seitan populations grow large enough to support more firms, new technologies are discovered that lower costs) Now Shift the demand curve, the supply curve, or both on another graph (same as the first) to illustrate both…arrow_forward
- Short-run supply and long-run equilibrium Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.arrow_forwardSuppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 200 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could decrease your expected lifespan by 4 years. The publication expected to cause consumers to demand seitan at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. PRICE (Dollars per pound) 10 9 8 2 1 0 0 40 Supply Demand 80 120 160 200 240 280 320 360 QUANTITY (Millions of pounds) 400 Demand Supply (?)arrow_forwardIn the competitive market for a particular good there are two types of producers: Type A and Type B. Type A producers use a better production technology than Type B producers, so Type A's average cost curve is lower than Type B's for any output level. Both types have upward-sloping marginal cost curves. Assume that the market demand is large enough so that both types of firms produce in the short-run (when the number of firms is fixed) and in the long-run (when the number of firms can change). Which of the following statements is correct regarding the short-run and the long-run equilibria of this competitive market? O a. In the long-run equilibrium, the marginal Type B firm produces where price equals its average cost and makes an economic rent. O b. All firms produce less in the long-run equilibrium than in the short-run equilibrium. O c. In the long-run equilibrium, MC = AC for Type A firms and MC = AC for Type B firms. d. In the short-run equilibrium, Type B firms produce at where…arrow_forward
- The market for quinoa is perfectly competitive and consists of firms that all have the same cost function, C(q) = 200 + g²/2. What is each firm's supply function? Oq = Oq = p Oq = p+ 25 Oq = p - 25 Suppose the market is in a long-run equilibrium. What is the price of quinoa? Op = 5 Op = 10 Op = 15 Op = 20 Op = 25 The market-level demand curve is Qp = 2000 - 50p. What is the equilibrium market-level quantity? Og = 250 Oq = 500 Oq = 750arrow_forwardSuppose that the perfectly competitive for market for milk is made up of identical firms with long-run total cost functions given by: TC = 4q³-24 q² + 40 q Where, q = litres of milk. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exist the market freely. If the market demand is : 1. What is the long-run equilibrium price? Number Qd = 6,000 - 120 P 2. What is the quantity produced by each firm? Number 3. What is the number of firms in the industry? Number 4. Suppose that market demand increases to Qd = 11,000 - 157.14 P. What is the new long-run equilibrium number of firms? Numberarrow_forwardAn industry currently has 100 firms, each of which has fixed costs of $8 and average variable costs as follows: The equilibrium price is currently $15. Each firm produces units, so the total quantity supplied in the market is units. In the long run, firms can enter and exit the market, and all entrants have the same costs as in the previous table. As this market makes the transition to its long-run equilibrium, the price will , quantity demanded will , and the quantity supplied by each firm will .arrow_forward
- Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. What is the equilibrium price and quantity given this information on demand in the market? Is each firm making a profit or loss? What is the amount of that profit or loss? What do you predict will happen over the long run?arrow_forwardThe graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because of limited space and resources for production activity: To increase output, the firm must bring older, less-reliable equipment out of storage, pay its workers extra for overtime hours, and so on. If the firm is able to practice price discrimination, using the two prices indicated by the two points indicated on the demand curve, use the area tool to outline the region that represents the net revenue (revenue minus production costs, but ignoring fixed costs). The lower boundary of the region should be slanted. To refer to the graphing tutorial for this question type, please click here. Price MR MG D Quantityarrow_forwardThe graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because of limited space and resources for production activity: To increase output, the firm must bring older, less-reliable equipment out of storage, pay its workers extra for overtime hours, and so on. If the firm is able to practice price discrimination, using the two prices indicated by the two points indicated on the demand curve, use the area tool to outline the region that represents the net revenue (revenue minus production costs, but ignoring fixed costs). The lower boundary of the region should be slanted. To refer to the graphing tutorial for this question type, please click here. Price MR MC AVC D Quantityarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning