Classify the statements based on whether each describes a perfectly (purely) competitive firm earning an economic profit, a at zero economic profits, or a firm operating at a loss.
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- Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the market quantity as the market leavesand then returns to long-run equilibrium
- Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 606. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 100 90 80 70 60 50 40 АТС 30 20 AVC 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) The following graph shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. (? COSTS…a. John operates a firm producing t shirts. There are many such firms producingidentical products to John. What market structure is this? Is it possible for John tomake a profit in the long run? Illustrate using an appropriate diagram. b. John decides to innovate his business and begins printing t shirts with customercreated content. Will John be able to make a profit in the short run and the longrun? Explain using relevant diagrams and comment on the implied market c. Provide a strategy for John to make greater than normal profits in the long run. Isthis likely to be the case in the market for this good?
- essay (on this firm) argues that, the firm would be better off by closing down. Do you a unit of output of this company is Birr L3. A student working on his senior A company in a perfectly competitive market has a total cost function given as: 6. TC 50+40+ The price agree? Explain By using the knowledge of relationshins among the various cost concepts, fill the bia cells of the following table. Quantity TFC TVC TC MC AFC AVC ATC 50 50 64 98 162 26 20 finms (Fi and Fa) producing identical product competing for like to dominate the other, if possible. They each defendsA market is in long-run equilibrium and firms in this market have identical cost structures suppose demand in this market decreases. Which of the folowing are coreet descriptors of what happens to tho individual firms and the whole market as the market fist leaves and then returns to long-run equilibrium? Instructions: You may select more than one answer cick the box with a check mark for correct answers and dick to empty the box for the wrong answers. 0 Market proe will decrease in the longrun. O Market quantity will remain the same in the long-run. O Individual firms' profit maximizing output will decrease in the long run. O Firms will exit the market inthe long run. O Individual firms' profit maximizing output wil decrease in the shon-nun. O Market quantity decrease in the long run. o Firms win enter into the market in the long run. O Market price wil decrease in the short-run. References eBook & Resources Leaming objective: 13-08 Calculato the Section Responding…Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 Quantity
- The following discussion describes a new inventorysystem used by J. C. Penney39:In an industry where the goal is rapid turnaroundof merchandise, J.C. Penney stores now holdalmost no extra inventory of house-brand shirts.Less than a decade ago, Penney would have storedthousands of them in warehouses across the U.S.,tying up capital and slowly going out of style.The entire program is designed and operated byTAL Apparel Ltd., a closely held Hong Kong shirtmaker. TAL collects point-of-sale data for Penney’sshirts directly from its stores in North America foranalysis through a computer model it designed.The Hong Kong company then decides how manyshirts to make, and in what styles, colors, andsizes. The manufacturer sends the shirts directlyto each Penney store, bypassing the retailer’swarehouses and corporate decision makers. a. Discuss how this case illustrates the concept ofthe opportunity cost of capital.b. How does this innovation also help in demandmanagement?Q:1 Describe the market structure and Calculate short run output, Price and profit Warner by Green Bull. Q:2 What could be the potential Long-run Price output equlibrium for Green Bull? Clearet State the conditipns and charastericts of such an equlibrium Q:3 Calculate the range which a Long-run equlibrium Price/output would ve found for Green Bull. Is there opportunity for economic profits in the Long run?6 692 unnuncituc inini CACCCU CMTC PTCC TC Curlרס Quantity (pizzas per hour) 1 2 3 Total cost, TC (dollars per hour) 18 30 48 12) Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. The price of a pizza is $12 and the variable cost of the first pizza is $8. If Giuseppe shut down, in the short run its economic loss is per hour. A) $0 B) $4 C) $10 D) $12 E) More information is needed to answer the question.
