if a perfectly competitive firm's output price is $10 and the firm is producing 500 units with a marginal cost of $7, then the firm should increase output in order to increase profit. Group of answer choices True False
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- A competitive firm is maximizing its profit by selling 150 units of output. The firm’s marginal cost is $8 and its average total cost is $6. The firm’s profit amounts to what?Determine a firm’s profit-maximizing decision in the short run.Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce: Price (S/doughnut) 0.35 p 0.30 0.25 0.20 0.15 0.10 0.05 0 0 10 20 30 40 50 60 Marginal Cost 70 80 90 Quantity (doughnuts/day) Average Total Cost 50 doughnuts per day. the quantity of doughnuts at which average total cost is minimized. the quantity of doughnuts at which average total cost equals the market price. the quantity of doughnuts at which marginal cost equals the market price.
- Your company operates in a perfectly competitive market.you were asked that your sales can increase by advertisement in short run.would you create an aggressive advertisement copaign for your product.elabrate with examplesPrice Average total cost AVC Demand Marginal cost Marginal revenue Q Quantity Discuss the firm plotted on the figure. What type of firm do you see?is the firm operating at the optimal point of production? is the firm making a proht? s the firm operating in the short or in the long run?Calculate the amount of profit or loss made by this firm at the equilibrium output. State the type of profit.
- Firms in the market for dog food are selling in a purely competitive market. A firm producing dog food has an output of 10,000 pounds of dog food, for which it sells for $0.50 a pound. At the output level of 10,000 pounds the average variable cost is $0.40, the average total cost is $0.70, and the marginal cost is $0.50. (a) What would you expect the firm to do in the short run? Explain.A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?The diagram shows a price-taking bakery's marginal and average cost curves, and its isoprofit curves. The current market price for bread is P*= 2.50. Which of the following statements is correct? 8 Price, P (€); cost 4 3.70 2.50 2 0 0 Select one: 20 40 60 80 100 120 140 Quantity of loaves, Q 160 180 O a. The bakery is a price setter and sets its price as 2.50. b. The bakery maximises its profits by supplying 160 loaves. O c. The bakery's profit is 200. Marginal cost curve Isoprofit curve: €200 Isoprofit curve: €80 Firm's demand curve Zero-economic- profit curve (AC curve) 200 O d. The bakery's profit decreases until the quantity is 120, and then increases. e. The marginal cost curve is the bakery's supply curve.
- Help Save & Exit Submit The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that produces children's mittens in a competitive market. Smitten's Production Costs Quantity (pairs of mittens) 15 Marginal Cost (dollars) $1.60 Average Total Cost (dollars) $1 20 2.00 1.25 25 2.45 1.49 30 3.55 4.00 1.83 35 2.14 40 5.50 6.00 8.50 2.56 45 2.94 50 3.5 Instructions: In part a, enter your answer as a whole number. In parts b, c and d, round your answers to 2 decimal places. a. If the market price of children's mittens is $6.00 per pair, how many pairs of children's mittens should Smitten produce per week to maximize its profits? pairs of mittens b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens? 24 c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of mittens? p..........: d.…Tomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which sell for $30 a bushel. At this level of output, the marginal cost is $30 a bushel, average variable cost is $30.50 a bushel, and average total cost is $34.50 a bushel. (a) What is the firm’s total fixed cost? You must show your work.MC ATC MR Quantity The diagram portrays Multiple Choice the equillibrium position of a competitive firm in the long run. a competitive firm that is realizing an economic profit the loss-minimizing position of a competitive finm in the short run: a competitive firm that should shut down in the short run, Price