b. If the market is price falls to $7, find the quantity a profit maximizing firm would choose to produce. Calculate profits or losses. Should the firm shut down immediately? Explain why or why not. c. If the market price starts out at $17 what would you expect to happen in the long run in this industry to the price and profits? Explain why.
b. If the market is price falls to $7, find the quantity a profit maximizing firm would choose to produce. Calculate profits or losses. Should the firm shut down immediately? Explain why or why not. c. If the market price starts out at $17 what would you expect to happen in the long run in this industry to the price and profits? Explain why.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 7PA
Related questions
Question
Hand written solution should not be accepted.
![Q
0
1
2
3
4
5
6
7
1. Perfect Competition
TFC
TVC
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
<¹ Complete the table.
TC
ATC
$10.00
$15.00
$20.00
$25.50
$32.00
$42.50
$57.00
$77.00
AVC
--
MC
--
a. If the market is price is $17, find the quantity a profit maximizing firm would choose to
produce. Calculate profits or losses.
b. If the market is price falls to $7, find the quantity a profit maximizing firm would choose to
produce. Calculate profits or losses. Should the firm shut down immediately? Explain why or
why not.
c. If the market price starts out at $17 what would you expect to happen in the long run in this
industry to the price and profits? Explain why.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86497141-5eca-4f35-bf67-696104e7ccec%2F2745dec0-36dc-4740-9790-fd69ebee2b9b%2Fw3ey3bl_processed.png&w=3840&q=75)
Transcribed Image Text:Q
0
1
2
3
4
5
6
7
1. Perfect Competition
TFC
TVC
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
<¹ Complete the table.
TC
ATC
$10.00
$15.00
$20.00
$25.50
$32.00
$42.50
$57.00
$77.00
AVC
--
MC
--
a. If the market is price is $17, find the quantity a profit maximizing firm would choose to
produce. Calculate profits or losses.
b. If the market is price falls to $7, find the quantity a profit maximizing firm would choose to
produce. Calculate profits or losses. Should the firm shut down immediately? Explain why or
why not.
c. If the market price starts out at $17 what would you expect to happen in the long run in this
industry to the price and profits? Explain why.
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