Question
In: Economics
1A.Draw two graphs. On the first, show the short-run profit maximizing output of an individual firm...
1A.Draw two graphs. On the first, show the short-run profit maximizing output of an individual firm earning an economic profit, including MR, MC, AVC, and ATC. On the second, show the short-run market equilibrium price and quantity. Explain how the industry supply curve and the market equilibrium price and quantity are determined.
B.Draw the MC, MR, ATC, and long-run ATC curves for a perfectly competitive firm in long-run equilibrium. Explain the relationship between those curves. Next, draw another graph showing long-run equilibrium for the perfectly competitive market. What is the relationship between the two graphs?
C.In the short run, a perfectly competitive firm may earn positive economic profits. On a graph, show this situation, using marginal revenue, marginal cost, average-total-cost, and average-variable-cost curves. Indicate the level of output the firm will produce and shade in the area that represents the firm's positive economic profit. In words, explain why your graph shows positive economic profits.
D.In the short run, a perfectly competitive firm may earn negative economic profits but continue to operate. On a graph, show this situation, using marginal revenue, marginal cost, average-total-cost, and average-variable-cost curves. Indicate the level of output the firm will produce and shade in the area that represents the firm's negative economic profit. Explain why your graph shows negative economic profits.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
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...
1. How are the firms profit maximizing output and price determined in the short run? long...
1.
How are the firms profit maximizing output and price determined in
the short run? long run?
2. Are the firms demand curve and the industrys demand curve
the same? why or why not?
3. What are the relationships among the different average
costs and marginal costs in the short run and long run?
4. How are firms supply and the industrys supply curves
determined in the short and long run?
11. Given the table below, what is the profit maximizing output for the producer in the short‑run?
11. Given the table below, what is the profit maximizing output for the producer in the short‑run?
Output - Total revenue - Total cost
1 2.00 1.00
2 4.00 1.50
3 6.00 2.50
4 8.00 4.50
5 10.00 7.00
a. 1 unit
b. 2 units
c. 4 units
d. 5 units
12. A competitive firm can incur losses but continue to operate in the...
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.
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 monopolistic competition should shut down in the short run if: a. price...
A profit-maximizing firm in monopolistic competition should shut
down in the short run if:
a.
price is more than average total cost.
b.
price is less than average variable cost.
c.
marginal revenue is equal to marginal cost.
d.
marginal revenue is less than price.
e.
price is less than average fixed cost.
The term “strategy” in terms of game theory refers to:
a.
the tendency for collusive firms to generate normal profits.
b.
each firm’s decision to charge 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
$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...
A profit-maximizing firm should shut down in the short run if: Answer choices: price is greater...
A profit-maximizing firm should shut down in the short run
if:
Answer choices:
price is greater than marginal cost.
total revenue is less than total variable cost.
the firm is earning less than a normal rate of return.
the firm is not able to cover its overhead expenses.
marginal cost is higher than average cost.
1. What is the difference between the short run and the long run for the profit-maximizing...
1. What is the difference between the short run and the long run
for the profit-maximizing firm?
2. The number of repairs produced by a computer retail shop
depends on the number of workers as follows:
Number of Workers
Number of Repair
Marginal Product (what each additional worker adds to the total
production)
Average Product
(the number of units per worker)
0
0
-
1
8
2
20
3
35
4
45
5
52
6
57
7
60
a. For...
Draw two separate graphs that show the Fed’s response in the case of a short-run aggregate...
Draw two separate graphs that show the Fed’s response in the
case of a short-run aggregate supply shock, one in the case of
prioritizing inflation and the other in the case of prioritizing
output stabilization, in the AS-AD framework.
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