The table shows some cost data for Frank's Fortune Cookies which operates in a perfectly competitive market. At a market price of $42.83 a batch, what quantity does Frank's produce and what is the firm's economic profit in the short run? When the market price is $42.83 a batch, Frank produces [ batches of cookies. When Frank produces 6 batches of cookies, Frank's economic profit is $

The table shows some cost data for Frank's Fortune Cookies which operates in a perfectly competitive market. At a market price of $42.83 a batch, what quantity does Frank's produce and what is the firm's economic profit in the short run? When the market price is $42.83 a batch, Frank produces [ batches of cookies. When Frank produces 6 batches of cookies, Frank's economic profit is $

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 13P

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Use the graph below of a perfectly competitive firm to answer these questions and assume that the industry price is $P4 Price P₂ aaaa P₁ MC AVC ATC Q₁Q₂ Q3 Q4 Quantity 1. At an industry price of P4, what is the profit mazimizing level of output and what type of profit/loss is the firm earning 2. If there is a decrease in industry demand causig the industry price to fall to P2, what is the profit maximizing level output, pr position of the firm or is this firm producing in the short run? 3. What industry price represents the long run profit position for the firm?
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do 1 2 1 4 5 6 7 A 9 TC MC TVC AVC ATC PRICE 12 14 5 7 10 14 19 t 32 Complete the above table and indicate the profit maximizing quantity of good to produce for the perfectly competitive firm HASRAHAST Below, graph the Demand, MR, ATC, AVC, and MC curves form the data given above. Be sure to indicate the profit maximizing quantity. Is the quantity the same as indicated above? 36 32 28 Perfect Competition Homework Problem 21 /2 8 TR Quity MR PROFIT GETTING STARTED 10 Getting to Know the Professor Q Search
Consider the perfectly competitive market for dress shirts. 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. 100 80 42.5, 60 ATC. 20 AVC 10 MO-O 10 15 20 25 30 35 40 50 QUANTITY (Thousands of shirts) For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indiſferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Shirts) (Dollars per shirt) Produce or Shut Down? Profit or Loss? 10 20 32 40 50 60 On the following graph, use the orange points (square symbol) to plot points along the…
Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, and the price of a doughnut is 10 cents, then this firm: 0.35 Marginal Cest 0.30 0.25 0.20 Average Tetal Cost 0.10 0.05 10 20 30 40 50 e 70 B0 90 Quantity oughnuts/ay O should shut down. O will earn an economic loss. O should produce 50 doughnuts. O should shut down in the long run.
Figure A Price (dollars per unit) Figure B Figure C Price (dollars per unit) Price (dollars per unit) 154 144 13 15 15- MC MC 14 13 14 13 MC ATC 12 ATC 12 ATC 12 10 MR 10 10 MR MR 9. 8 8 8 7 7 6 6 06 100 Quantity (units) T10 90 00 T10 T 10 Quantity (units) 90 100 Quantity (units) Use the figure above to answer this question. Consider a perfectly competitive firm in a short run equilibrium. Figure shows a firm in bad times because the firm makes a(n) O A; economic loss of $4 per unit if the firm decides to operate O A; economic loss of $4 so it must close O B; economic loss of $3 per unit O B; economic profit because the price exceeds average variable cost O C; normal profit and can stay open in the long run