In a market that allows free entry and exit, when does the process of entry and exit end for the typical firm in the market? A. when average revenue exceeds marginal cost B. when total revenue is equal to average total cost C. when accounting profit is zero D. when economic profit is zero
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Multiple choice questions -
37)In a market that allows free entry and exit, when does the process of entry and exit end for the typical firm in the market?
- A. when average revenue exceeds marginal cost
- B. when total revenue is equal to average total cost
- C. when accounting profit is zero
- D. when economic profit is zero
36)
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- Question 1 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 costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?in which of the following statement is true? (choose one letter only) a. the Marginal Revenue is the approximate revenue from the production and sale of the x+1 unit after x units have been sold.b. the Marginal Cost is the approximate cost of producing the x−1 unit before x units have been produced. c. the Marginal Profit is the profit from the production and sale of the xth unit. d. All of these e. none of the aboveMultiple choice - microeconomics 39) A profit-maximizing firm in a competitive market produces small rubber balls. When the market price for small rubber balls falls below the minimum of its average total cost but still lies above the minimum of average variable cost, what happens to the firm? A. It will experience losses, but it will continue to produce rubber balls. B. It will be earning only accounting profits. C. It will be earning both economic and accounting profits. D. It will shut down. 38)
- only typed answer Assume a competitive firm faces a market price of $120, a cost curve of: C = 13q3 + 20q + 500, and a marginal cost of: MC = q2 +20. What is the firm's profit maximizing output level? ?? Units (round your answer to two decimal places) What is the firm's profit maximizing price? ??? (round to the nearest penny) What is the firm's profit? ??? (round to the nearest npenny) In the short-run, this firm should ?? produce or shut down??Question 3 The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. a. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? b. Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. [Upload a picture] c. Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market.Independent University, Bangladesh ECN-201: Principles of Microeconomics Spring 2021 Final Assignment 1. Use the table below to answer the following questions: Costs Total Cost Marginal Cost Revenues Price ($) Quantity Produced Marginal Revenue Total Quantity Demanded Revenue 170 160 150 140 100 140 184 2 3 3 230 280 4 5 4 5 130 120 110 100 95 335 395 6 7 8 7 475 8 575 a. Find the average fixed cost and average variable cost for the 4" unit of output. b. How much does profit change if 6 units are sold instead of 5?
- 1. A firm in a perfectly competitive industry has fixed costs of FC = 15, marginal costs of MC = 5 + 14g, and average variable costs of AVC = 5 + 7q. (a) What are the firm's variable costs (VC)? (b) What is the firm's total cost function? (c) If the price is $75, how much does the firm supply? (d) Does the firm continue to supply this quantity in the short-run? (e) Suppose there exists a standard market demand function from consumers (downward slopping). Please provide a logical discussion about how the market achieves short-run equilibrium.P E A MR S ATC Av C What point reflects the price that a monopolist would charge? (letter) Answer 1 Q AV What point determines the output that would be produced under perfect competition? (letter)MC ATC MR 100 200 300 400 500 Quantity (bottles per week) Figure 2 (a) The figure 2 shows the situation facing Well Done, Inc., a producer of steak sauce. i. What quantity does Well Done produce? 11. What does it charge? How much profit does Well Done make? 111. (b) If all steak sauce firms have identical cost curves and face identical demand curves, what happens to the number of firms in the market in the long run? Price and cost (dollars per bottle) |
- (1) Use the graph to answer the question below. The quantity is measured in thousands of units. What will this firm decide to do in the long run? A-It will stay in the market because the price is above its AVC at its profit-maximizing output. B-It will leave the market because the price is below its ATC at its profit-maximizing output. C-It will increase its price to point B to earn normal profit. D-It will increase its output until its profit-maximizing output level is equal to B. E-Insufficient data to determine. (2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do? A-Produce more milk. B-Produce less milk. C-Shut down in the short run. D-Operate in the short run and leave the industry in the long run. E-Insufficient information to determine (3) A firm operating in a perfectly competitive market cannot…Question 1 a. Draw the marginal cost and average total cost curves for a typical firm. Explain why the curves have the shapes that they do and why they cross where they do. b. Does a competitive firm's price equal its marinal marginal cost in the short run, in the long run, or both? Explain c. What is the law of diminishing returns and what does it imply about the shape of the firm's average variable cost and marginal cost curves. d. Using the table below indicate which firm has (i) disc.nomiesof scale and (ii) constant returns to scale over the entire range of output. Explain your answer Question 2 a. Apple faces competition from many other firms in the owrld market for mobile phones; therefore, apple cannot have market power. Do ou agree with this statement? b. the mrginal revenue for a perfectly competitive firm is equal to the market price. Why is this not the case for a monopolist? c. A social cost is applied to the monopolist market structure. Why does this occur?…13. Firms in Competitive Markets The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. The price of fertilizer must be less than marginal cost. The price of fertilizer must be equal to average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Prics and Cast MC Firm Demand Quantity Market Quantity (?) If firms in the market are producing output but are currently making economic losses, market, and indicates the corresponding supply curve. illustrates the present situation for the typical firm in the Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check…