Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 10 B 6 4 MC 1 2 3 QUANTITY ATC AVC Refer to Figure 14-1. The firm should shut down in the short run if the market price is less than $6. above $13. O above $6 but less than $13. above $6 but less than $18.
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- Graph below represents the cost structure of an individual firm in a perfectly competitive market. ATC MC 50 40 e AVC 30 20 10 8 10 11 12 Quantity (per day) a. Write down the break-even and the shut-down points (both corresponding quantities and prices) for this firm on the table below. quantity (q) Price (P) Break-even Point Shut-down Point b. If the price in this market is $50, find the profit maximizing output of firm A by explaining the profit maximizing condition for a perfectly competitive firm. Calculate total revenue, total cost, total variable cost and the profit of the firm at the profit maximizing output. Show your calculations If the price decreases to $25. C. i. Considering the short-run: would firm earn positive or negative profit in this new scenario? Would it continue operating or stop production? Explain your answer ii. Considering the long-run: would new firms enter to the market or would existing firms exit from it? What would happen to the market equilibrium?…The perfectly competitive farmer's profit maximizing level of output when price is $2 is ___ units of output Cost per unit 296 O 700 200 700 1000 200 0 MC 1000 ATCesti a firm operating in a purely competitive market MC 40 36 32 28 24 ATC 20 16 AVC 12 8 Q 8 12 16 20 24 28 32 26. What would be the short-run equilibrium quantity produced by this firm if the market price were $32? 9. Cligk Saug and Submit to caue and suhmit Click Save All Answers to save all answers. %24 4.13. At what price the competitive firm is making a zero profit? Price and cost P₂₁ P₁ Po 0 ph A) Po B) P₁ - C) P₂ D) P3 MC ATC 25emoont noleamo al bris 18ey 8 000 Low Vibles baxil eir) do Q Q, Q₂ Qz AVC Quantity с Fitong pimonste 00012 al hog olnionobe bris 00088 al mong ginasA 00012 al ho Jonq bolinusapi 00052 al fong orase bhe 0009 eng poitructa 00082 ei silang onoos bis 00013 al q prinudso 14. In the diagram of question 13, if the market price is P₁, what will be the total revenue? A) OP₁bQ₁ B).horize B) OP₁fQ3 C) OP1eQ2 D) P₁P2de aboubong slimtia lioa anil 16 droun elbubong nalimie lise emit elbubong 1stnia ne arinit v touborq ernaa erilyoxa lies aermit to admin apie 15. In the diagram of question 13, if the market price is P₁, what will be the total cost? A) OP₁bQ₁ yonepifle evideolls allu14mco allellegon B) P₁P3cb C) P₁P2de D) OP3CQ₁ etaal vier ristem faed farll aloubog nailiaqnco dilatiogonom telinu muaATC Price MC AVC 8. 7- 9. 10 11 12 13 Quantity The graph shows the cost curves of a firm in a competitive industry. The market price is $5. In the short run, the firm should Choose one: * A produce the output at which MR = MC and earn a profit. B. produce the output at which MR = MC and suffer a loss. O C. shut down the operation. 9 D. There is not enough information to answer the question. 1st attemptPrice, cost of bushel $30 MC 26 22 ATC 18 14 10 Break-even price 2 1 4. 6. Quantity of tomatoes (bushels) Look at the figure Total Cost for Tomato Producers. The market for tomatoes is perfectly competitive. The market price of a bushel of tomatoes is $14. The farmer's total cost at the profit-maximizing number of bushels is: O $3.50. $14.00. $56.00. O $72.00. O None of these options is correct.Suppose that a firm in a competitive market has the following cost curves: 13- 12 11 10 Price +++ 9- 8. $3. Refer to Figure 14-1. The firm's short-run supply curve is its marginal cost curve above $4.50. MC 1 2 3 4 5 6 7 8 9 10 11 Quantity $6.30. O $1 ATC AVC1) The cost curves for a firm in a perfectly competitive industry are given below. Complete the table. If the firm operates in a perfectly competitive market, and the market price is $25 per unit, what Quantity should this firm produce at? TFC TC TVC AVC ATC MC TR S100 S100 1 S100 S130 2 S100 S150 S100 S160 S100 S172 5 S100 S185 6 S100 $210 S100 $240 S100 $280 S100 $330 10 S100 $390 Table 9.1The average variable cost (AVC) 1 and average total cost (ATC) of a price taker firm are provided below. According to this table, if the marginal revenue (MR) is $95, what decision should this firm take in the short-run? Quantity Average Variable Cost Averge Total Cosm 100 25 100 20 150 20 150 23 100 15 100 17 100 19 15030 150 19 150.25 11 O Exit the market Enter in to the market The firm will go for a temporary shutdown Continue production16 $20 $18 MC АТС i of $16 P = MR $14 $12 AVC $10 $8 $6 $4 $2 $0 200 400 600 800 1,000 1,200 Output (Q) The diagram above shows a Perfectly Competitive firm in the short-run. At the profit maximizing Output (Q) level, the firm will earn a Total Profit of: Select one: а. $1,000 b. $1,600 с. $3,200 d. $2,000Figure 14-13 Suppose a firm in a competitive industry has the following cost curves: 10 4 3 C ↑Price MC 1 2 3 4 5 6 ATC AVC Pl P2 P3 P4 7 8 QuantityFigure 14-13 Suppose a firm in a competitive industry has the following cost curves: 10 9- 8 7. 6 اکیه 3.5 2 1- Price 1 2 3 4 MC 5 6 7 8 ATC AVC Refer to Figure 14-13. If the price is $2 in the short run, what will happen in the long run? ◆a. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. b. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. ● C. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. d. Because the price is below the firm's average variable costs, the firms will shut down. 45SEE MORE QUESTIONS