Answered: With the and of a well labelled…

With the and of a well labelled diagrams, explain how a profit - maximizing firm operating under perfect competition adjests from short run to long nun equilibrium

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter26: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 5E

See similar textbooks

Related questions

Q: In the theory of perfect competition, the firm faces a demand curve that is and the market demand…

A: In the realm of perfect competition, firms operate within a market structure characterized by…

Q: High-power experimental engines are being developed by the Stevens Motor Company for use in its new…

A: The objective of the question is to calculate a confidence interval for the average maximum…

Q: What is inflation? A) A decrease in the general price level B) An increase in the general price…

A: Macroeconomics examines the working, composition, and dynamics of an economy. To comprehend and…

Q: 4. Crowding out, crowding in, and the twin deficits The stimulative effect that budget deficits can…

A: Budget deficit may be defined as when the government expenditure exceeds the revenue collected by…

Q: Royal Aviation Corporation is considering purchasing a piece of equipment to manufacture wing…

A: The objective of the question is to determine whether the investment in the equipment is…

Q: What happens to the budget line if the government applies a specific tax of $1 per gallon of…

A: The budget line represents all possible combinations of the goods that can be bought at the given…

Q: Let's say that the Fed is concerned about recession. It would use [Select] doing so is [Select]…

A: The Fed refers to the short name for the Federal Reserve System, which is also the central bank of…

Q: Rent controls force landlords to price apartments below the equilibrium price level. An immediate…

A: The issue here includes understanding the drawn-out impacts of lease control on the real estate…

Q: Banking System Assets Liabilities Reserves 150 Checkable Deposits 950 Loans Securities 900 Borrowing…

A: The objective of the question is to calculate the potential increase in the money supply if the…

Q: **Practice**

A: Answer: option (D) " There are two pure strategy Nash Equilibrium, one with (U,L) and one with (M,…

Q: 15. Given the data provided in the table below, what will the marginal revenue equal for production…

A: Marginal Revenue (MR) is the additional revenue that is gained from selling one more unit of a…

Q: An economy is described by the following equations C = 300+ 0.5 (Y-T) Y* = 1000 T=180 IP 50 G 150 NX…

A: The objective of the question is to determine the policy that the government should implement to…

Q: If the AD shortfall is $700 billion and the MPC is 0.95,(a) How large is the desired fiscal…

A: It refers to government actions aimed at increasing economic activity through increased spending or…

Q: Discuss the roles and functions of the IMF, and highlight any TWO (2) criticisms it has drawn over…

A: Roles and Functions of the IMF:Provides financial assistance to countries facing balance of payments…

Q: For each of the regions listed in the following table, use the midpoint method to identify if the…

A: The Elasticity of demand measures the degree of responsiveness of demand to change in price level.…

Q: PRICE $4 Supply Demand 10 QUANTITY (units) In the market shown in the graph above, at a price of $5,…

A: Market equilibrium refers to a scenario at which the quantity demanded is equal to the quantity…

Q: 30 28 26 24 22 20 18 IC 14 12 10 8 C 4 2 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 For the…

A: Search cost is the time, energy and money used to expand their knowledge or services for both…

Q: 4. In 5 years, $18,000 will be needed to pay for a building renovation. In order to generate this…

A: The annual payment that is most nearly necessary, made at the end of each of the first three years…

Q: MR MC ATC $6 AVC $5 $4 $3 y* Based on this graph if the Average Revenue is 7.50, and the optimal…

A: Average total cost refers to the approximate total cost of production at different levels of…

Q: Price level targeting: (1-7) Pe+YPO + (1+ yt) 12' 1 2π* Inflation averaging: (1) S Pt+Pt-s+12 where…

A: Central banks use price level targets to keep prices stable over the long term, which helps the…

Q: A special-purpose 30-horsepower electric motor has an efficiency of 90%. Its purchase and…

A: Present worth, also known as present value, is a financial concept used to evaluate the current…

Q: Krell Industries has a share price of $21.35 today. If Krell is expected to pay a dividend of $ 0.61…

A: A capital is a broad term known as cash or liquid asset, that has monetary value. It is the…

Q: 1. In Figure 7.1, panel (c) shows the case where Country 1 has higher output than Country 2 because…

A: Resources like land (natural resources), labor (human effort), capital (machines and equipment), and…

Q: What is inflation? A) A decrease in the general price level B) An increase in the general price…

A: The objective of the question is to understand the concept of inflation in economics.

Q: You are saving for the down payment on a house, so you put $1,000 in an account every 6 months. If…

A: An interest rate is charged on the borrowing money of consumers. It is charged by the lender of the…

Q: Idea Inc. is a small publishing company operating in the college and textbook market, which is one…

A: Business economics entails navigating difficult market situations that necessitate extensive study…

Q: What is inflation? A) A decrease in the general price level decrease in the money supply C) A D) An…

A: Macroeconomics is a branch of economics that studies the behavior of the economy as a whole. It…

Q: 2) Suppose that consumers of a good can be represented by the demand function Q (P) = 50 - P. The…

A: The monopoly market is represented by the single seller in the market. The single seller in the…

Q: Answer only correct A country had real GDP per person of 5800 in 2005 and has had average real GDP…

A: GDP basically refers to the total monetary value of all the final goods and services that a nation…

Q: Hand written solutions are strictly prohibited

A: The objective of this question is to calculate the profit per unit and total profit per period for a…

Q: view picture

A: In 1964, the national debt increased by $5.9 billion. This increase occurred because the outlays…

Q: monopolist.

A: When regarding the monopolist's market, it approaches that the monopolist has extensive management…

Q: What is inflation? A) A decrease in the general price level B) An increase in the general price…

A: The objective of the question is to identify the correct definition of inflation among the given…

Q: Based on the T Chart, if The FED Bought $1,000 in Bonds from this bank what numbers would change? I…

A: The central bank undertakes the OMO (open market operations) and involves two types of…

Q: An isoquant curve for producing a 10 lb bag of wheat is given as below. What is the Marginal Rate of…

A: The objective of the question is to calculate the Marginal Rate of Technical Substitution (MRTS) at…

Q: Assume a perfectly competitive market with MWTP(Q)=59–Q and MC(Q)=17+Q. What is the change is…

A: Change in Consumer Surplus: Change in CS = CS new - CS original = 34 - 42…

Q: ssume quantities need not be integers. A monopolist incurs marginal cost equal to $2 per unit. This…

A: The monopoly refers to market structure where only single firm exists in the market. There is no…

Q: Aldrin is a call center agent and has a daily wage of ₱ 2500. Aldrin takes an antihistamine drug…

A: A methodical technique for assessing the possible costs and advantages of a decision is cost-benefit…

Q: Suppose that the fish processor could use a different production method that involves recycling…

A: The economic profit for recycling and non-recycling for the fish processor and the water park is…

Q: 2. A firm's production function is Q = L0.5K 0.5. It is the short run and K is fixed at 100. The…

A: The production function is the mathematical relationship between different bundles of inputs and…

Q: One of the concerns of economists and policy makers is the share of the labor factor in the total…

A: Given,

Q: Suppose Hanger Helicopters is considering signing a long-term contract with the union representing…

A: In economics, nominal variables are the variables that are expressed in the current year's prices.…

Q: Yuki has a utility function given by u(x) = ln(x). She faces a gamble that pays 10 with probability…

A: In economics, preferences are quantified mathematically using utility functions. It uses an…

Q: do fast

A: The objective of the question is to determine how many units of x1 Katie Kwasi will consume after…

Q: **Practice**

A: answer: 4.5Explanation:

Q: K = Capital L = Labor Q = Outputs A) Determine the number of workers the form should hire to…

A: The capital, labor and the quantity produced at different level is provided…

Q: Q2. Suppose we have the following Demand and Supply equations. Here u₁t are IID (0,0%) and u2t are…

A: Demand and supply interact in markets to determine the equilibrium price and quantity of products…

Q: 4. Consider the following price-demand equation for a product, assuming price and demand are both…

A: A demand equation in the form Qd = a-bP states how the price (P) of a good determines the quantity…

Q: 5 GDP (Y) Consumption (C) Investment (I) $ 0 $ 60 $ 30 100 120 40 200 180 50 300 240. 60 400 500 300…

A: It contributes to the expansion of productive capacity. This leads to economic growth.Increased…

Q: Consider a consumer who consumes pizzas and soft drinks. The utility function is given by U (p, s) =…

A: The satisfaction a customer experiences from consuming a combination of services and items is…

Question

Please give me correct answer and full explanation with drawing carefully. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.

With the and of a well labelled diagrams, explain how a profit - maximizing firm operating under perfect competition adjests from short
run to long nun equilibrium

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Profit Maximization in Perfect Competition: Short-Run vs. Long-Run

VIEW

Step 2: Analyze the Short Run Equilibrium

VIEW

Step 3: Analyze the Long Run Equilibrium

VIEW

Solution

VIEW

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

The market for peanut butter in Nutville ismonopolistically competitive and in long-runequilibrium. One day, consumer advocate Jif Skippydiscovers that all brands of peanut butter in Nutvilleare identical. Thereafter, the market becomes perfectlycompetitive and again reaches its long-run equilibrium.Using an appropriate diagram, explain whether eachof the following variables increases, decreases, or staysthe same for a typical firm in the market.a. priceb. quantityc. average total costd. marginal coste. profit
By making use of graphs explain the difference between perfect competition andmonopoly market. Indicate how each of these two markets maximize their profits
The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a purely competitive firm producing differe quantities of chocolate gift boxes. The market price for a box of chocolates is $4 per box. Instructions: Enter your answers as a whole number. a. Fill in the marginal revenue (MR) and average revenue (AR) columns. Choco Lovers Cost and Revenue Quantity TC MC MR AR of Gift Boxes ($) ($) ($) ($) 55 1 10 57 0.50 15 62 1 20 72 25 92 4 30 122 6.
Next question ice and cost (dolars per par) The graph shows the long-run situation facing a producer of running shoes. In the market for running shoes, all the firms face a similar demand curve and have similar cost curves 120- Draw a vertical arrow that shows the firm's markup at the profi-maximizing quantity. Label R. MC t004 What is a fim's markup? /ATC A fem'u markup is the amount by which exceeds OA price; average total cost 60 OB. price, marginal cost OC. average total cost marginal revenue OD. average total cost marginal cost 20- Describe the market of a firm in perfect competition MR O 25 7 100 1is e ths 200 zis Quantity (pain of shoes per week) A firm in perfect competition has OA a markup similar to a firm in monopolistic competition OB. no markup > Draw only the objects specfied in the question Oc. a negative markup O D. a markkup similar to a monopoly
How a firm respond to economy profits and economy losses in perfectly competitive market?
Instructions: For profit/loss, round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign () in front of those numbers. A loss should be entered as a negative number. Check my work b. Given a price of $8 per gift box, how many boxes of chocolate should Choco Lovers produce? gift boxes What will the profit or loss be per gift box? 24 per gift box C. Suppose that Choco Lovers raises the price to $10 per gift box. Now how many boxes should Choco Lovers produce? gift boxes What will the new profit or loss be per gift box?
PRODUCTION| 2 8 10 12 14 LEVEL MARKET 3 3 3 3 PRICE ТОTAL INCOME TOTAL FIXED 14 14 14 14 14 14 14 COST ТОTAL 4.5 5.5 6.7 8.2 10 13.25 VARIABLE 25 COST TOTAL COST TОTAL BENEFIT MARGINAL 3 3 3 3 INCOME AVERAGE TOTAL COST Develop the following numerical example of perfect competition, which should add the procedure for calculating the missing costs, income, and profit. Considering the following data: a) Indicate at what level of production the MC is equal to the price, so that the company is perfectly competitive in the short term. 3. 3.
Imagine you own a company STR LLC. You produce homogenous and easily available goods. Explain the type of market you are operating in. Elaborate your pricing strategy where you can earn normal profits. You have to show production costs and revenue in a table at what production levels you manage to earn profits or otherwise make losses. References: • Makowski, L., & Ostroy, J. M. (2001). Perfect Competition and the Creativity of the Market. Journal of economic literature, 39(2), 479-535. Kaldor, N. (1935). Market imperfection and excess capacity. Economica, 2(5), 33-50.
The cost data in the following table are for Marshall’s Meats, a perfectly competitive firm. Round your answers to 2 decimal places. Output Average Variable Cost AverageTotal Cost MarginalCost Total Cost 0 / / / $ 100 1 $ $ $ 130 2 150 3 180 4 220 5 270 6 330 7 440 a. Complete above the table. b. What is the break-even price? Break-even price: $ c. What is the shutdown price? Shutdown price: $ d. If the market price of the product is $50, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; (Click to select) Loss Profit : $ e. If the market price of the product is $110, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; (Click to select) profit loss : $
The cost data in the following table are for Marshall’s Meats, a perfectly competitive firm. Round your answers to 2 decimal places. Output Average Variable Cost AverageTotal Cost MarginalCost Total Cost 0 / / / $ 95 1 $ $ $ 115 2 125 3 150 4 200 5 270 6 350 7 450 a. Complete above the table. b. What is the break-even price? Break-even price: $ c. What is the shutdown price? Shutdown price: $ d. If the market price of the product is $50, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; : $ e. If the market price of the product is $100, what quantity will Marshall’s Meats produce? What will be its profit or loss? Quantity: ; : $
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?
In perfect competition, why do firms act as price takers? What happens if they charge a different price than market price? Draw graph if necessary