Question
In: Economics
In a perfectly competitive market, a profit-maximizing firm produces 2000 pounds of butter per week in...
In a perfectly competitive market, a profit-maximizing firm produces 2000 pounds of butter per week in the long run equilibrium. Answer each of the following questions with two diagrams, one for the butter market and another for the individual butter firm. If the market demand for butter increases …
a) How does it affect the butter market and the individual butter firm in the short run?
b) In the long run, how does the butter market adjust, and what will be the impacts on the individual butter firm?
Solutions
Rahul Sunny answered 6 months agoRelated Solutions
10. A profit maximizing firm in a competitive market produces chairs. The firm, which is a...
10. A profit maximizing firm in a competitive market produces
chairs. The firm, which is a price-taker, faces a price of $35 for
its product. Its average variable cost is $24 and its average fixed
cost is $9 at the quantity where marginal cost equals marginal
revenue. In the short run, the firm
A. should raise the price of its product.
B. should lower the price of its product.
C. will experience losses but will continue to produce
chairs.
D....
Consider a profit-maximizing firm operating in a perfectly competitive industry. If the equilibrium market price of...
Consider a profit-maximizing firm operating in a perfectly
competitive industry. If the equilibrium market price of the good
falls below the minimum of the firm's average total cost curve but
is greater than the minimum of its average variable cost curve, the
firm:
Group of answer choices
should increase the price of its product in order to increase
profits
should increase the price of its product in order to sell more
units of output
should shut down and suffer a...
A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed...
A profit-maximizing firm in a perfectly competitive market
operates in the short run with total fixed costs of D
$2,250 and total variable costs (TVC) as is below. The
firm can only produce integer amounts of output (Q):
Q (Output)
TVC (Total Variable Cost
0
0.00
1
2,500
2
4,000
3
5,000
4
6,200
5
7,600
6
9,360
7
11,500
8
13,860
9
16,450
10
19,200
11
22,310
3a. How much output should the firm
produce if it can sell...
A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed...
A profit-maximizing firm in a perfectly competitive market
operates in the short run with total fixed costs of
$6,500.00 and total variable costs (TVC) as is below. The
firm can only produce integer amounts of output (Q)
Q
TVC
0
0.00
1
8,000.00
2
15,000.00
3
20,000.00
4
23,000.00
5
25,000.00
6
29,000.00
7
33,500.00
8
39,000.00
9
46,000.00
10
53,500.00
11
61,200.00
12
72,000.00
_______3. (2.5 pts.) How much output should the firm produce if
it can sell all...
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
Please draw the graphs to show different profit-maximizing scenarios that a perfectly competitive firm will be...
Please draw the graphs to show different profit-maximizing
scenarios that a perfectly competitive firm will be facing with
different price levels. Shade the areas of profit or loss to
support your arguments
A) The Firm is operating and earns a positive profit.
B) The Firm is operating and earns 0 profit.
C) The Firm is operating but earns negative profit.
D) The Firm is indifferent between operating and shutting
down.
E) The Firm Shuts down.
If average variable cost is greater than price, a profit maximizing firm in a perfectly competitive...
If average variable cost is greater than price, a profit
maximizing firm in a perfectly competitive market should *
continue to produce its current output level.
shut down in the short run.
increase its output level to minimize its loss.
none of the above.
1. The Profit-maximizing Level of output for a perfectly competitive firm in the short run occurs...
1.
The Profit-maximizing Level of output for a perfectly competitive
firm in the short run occurs where:
a. marginal revenue equals price
B. Total revenue equals total cost
C.marginal cost equals price
D. Average revenue equals average total cost
2. Marginal revenue is a firms:
A. Ratio of the change in total revenue to change in
output.
B. Profit per unit times the number of units sold
C. Ratio of average revenue to total revenue
D. Increase in profit when...
Describe the profit maximizing position of a perfectly competitive firm in the long-run. Use a diagram...
Describe the profit maximizing position of a perfectly
competitive firm in the long-run. Use a diagram to motivate your
answer.
How do you determine the profit maximizing (loss minimizing)quantity for the perfectly competitive firm...
- How do you determine the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to produce?
- Assume a competitive market has firms earning large economic profits. What is expected to happen over time in this competitive market and to firm's profits?
- Why is the demand curve facing a monopolist downward sloping while the demand curve facing a perfect competitor is horizontal?
- How can a monopoly maintain its single-seller status?
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