Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Ball bearings, inc., faces costs of production as follows:

07/11/2020 Client: arwaabdullah Deadline: 3 days

·FIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRY

• Because a competitive firm is a price taker, its revenue is proportional to the amount of output it produces. The price of the good equals both the firm's average revenue and its marginal revenue.

• To maximize profit, a firm chooses a quantity of output such that marginal revenue equals mar- ginal cost. Because marginal revenue for a com- petitive firm equals the market price, the firm chooses quantity so that price equals marginal cost. Thus, the firm's marginal-cost curve is its supply curve.

• In the short run when a firm cannot recover its fixed costs, the firm will choose to shut down temporarily if the price of the good is less than average variable cost. In the long run when the firm can recover both fixed and variable costs, it

KEY CONCI.PJ:S. competitive market, p. 280 average revenue, p. 281

1. What is meant by a competitive firm? 2. Explain the difference between a firm's revenue

and its profit. Which do firms maximize? 3. Draw the cost curves for a typical firm. For a

given price, explain how the firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm's total revenue and total costs.

4. Under what conditions will a firm shut down temporarily? Explain.

1. Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price of oil rises. a. Using diagrams, show what happens to the

cost curves of an individual boat-making firm and to the market supply curve.

b. What happens to the profits of boat makers in the short run? What happens to the number of boat makers in the long run?

2. You go out to the best restaurant in town and order a lobster dinner for $40. After eating half

will choose to exit if the price is less than average total cost.

• In a market with free entry and exit, profits are driven to zero in the long run. In this long-run equilibrium, all firms produce at the efficient scale, price equals the minimum of average total cost, and the number of firms adjusts to satisfy the quantity demanded at this price.

• Changes in demand have different effects over different time horizons. In the short run, an increase in demand raises prices and leads to profits, and a decrease in demand lowers prices and leads to losses. But if firms can freely enter and exit the market, then in the long run, the number of firms adjusts to drive the market back to the zero-profit equilibrium.

marginalrevenue,p.282 sunk cost, p. 286

5. Under what conditions will a firm exit a " market? Explain. ( 6:\Does a firm's price equal marginal cost in the ~--thort run, in the long run, or both? Explain. V Does a firm's price equal the minimum of

average total cost in the short run, in the long run, or both? Explain.

8. Are market supply curves typically more elastic in the short run or in the long run? Explain.

of the lobster, you realize that you are quite full. . Your date wants you to finish your dinner because . you can't take it home and because "you've already paid for it." What should you do? Relate your answer to the material in this chapter.

3. Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's short-run decision regarding shutdown and his long-run decision regarding exit?

total cost and total revenue given in following table:

012 3 4 56 7

Total cost Total revenue

$8 9 10 $0 8 16

11 13 19 27 37 . ' ' 24 32 40 48 .Sf> ·

a. Calculate profit for each quantity. How much should the firm produce to maximize profit?

b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2~.) At what quantity do these curves cross? How does this relate to your answer to part (a)?

c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?

5. Ball Bearings, Inc. faces costs of production as follows:

Total Total Fixed Variable

Quantity Costs Costs

0 $100 $ 0 1 100 50 2 100 70 3 100 90 4 100 140 5 100 200 6 100 360

a. Calculate the company's average fixed costs, average variable costs, average total costs, an~ marginal costs at each level of production.

b. The price of a case of ball bearings is $50. Seeing that she can't make a profit, the Chief Executive Officer (CEO) decides to shut down operations. What are the firm's profits/ losses? Was this a wise decision? Explain.

c. Vaguely remembering his introductory economics coutse, the Chief Financial Officer tells·the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. What are the firm's profits/losses at that level of production? Was this the best decision? Explain.

6. Suppose the book-printing industry is competitive and begins in a long-run equilibrium. a. Draw a diagram describing the typical firm

in the industry. b. Hi-Tech Printing Company invents a new

process that sharply reduces the cost of

CHAPTER 14 FIRMS IN COMPETITIVE MARKETS

printing books. What happens to Hi-Tech's profits and the price of books in the short run when Hi-Tech's patent prevents other firms from using the new technology?

c. What happens in the long run when the pat~nt expires and other firms are free to use the technology?

7. A firm in a competitive market receives $500 in total revenue and has marginal revenue of $10. What is the average revenue, and how many units were sold? .

8. 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?

The market for fertilizer is perfectly competitive. Firms in the market are producing output, but are currently making 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 in the market. '

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.

10. The market for apple pies in the city of Ectenia is competitive and has the following demand schedule:

Price Quantity Demanded

$ 1 1.200 pies 2 1,100 3 1,000 4 %0 5 800 6 700 7 600 8 500 9 400

10. . 300

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Quality Homework Helper
Essay Writing Help
Top Grade Essay
Buy Coursework Help
Peter O.
Writer Writer Name Offer Chat
Quality Homework Helper

ONLINE

Quality Homework Helper

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Essay Writing Help

ONLINE

Essay Writing Help

I am a qualified and experienced Writer, Researcher, Tutor, analyst and Consultant. I hold MBA (Strategic Management) (Finance and Marketing) & CPA.K (Accounting and Finance.)

$62 Chat With Writer
Top Grade Essay

ONLINE

Top Grade Essay

Working on this platform from a couple of time with exposure of dynamic writing skills gathered with years experience on different other websites.

$62 Chat With Writer
Buy Coursework Help

ONLINE

Buy Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Peter O.

ONLINE

Peter O.

Hello, I can assist you in writing attractive and compelling content on ganja and its movement globally. I will provide with valuable, informative content that you will appreciate. The content will surely hit your target audience. I will provide you with the work that will be according to the needs of the targeted audience and Google’s requirement.

$55 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Edit cool math games - Coyote removal in texas - On delay timer circuit using 555 - Continental carriers inc case study solution - Till he unseamed him from the nave to the chaps - Wk 4 - Terminology of the Body Systems - OSI and TCP/IP Models - How to hack eobot mining - Donuts-r-us database - Hersey and blanchard's situational theory focuses on - Average bond enthalpy definition ib - Essay On Decoding The Adult World In The Films - DM AW-4 - Key issues in contemporary policing - Psychological first aid online post test answers - Case Analysis - Cmgt qs - Kleenheat gas port hedland - The radioactive isotope tritium decays - Selection Process - Defence approved software list dasl - Circuit switched wan technologies - Ikea vidga rail triple track - Wgu c229 time log obesity - Bus 520 leadership and organizational behavior - LDR531 Week 6 FInal Exam SCORE 90 PERCENT - Facility condition assessment report template - 700- to 1,050 word HR report - Nursing - Nick swardson pretend time donkey show - Animal farm activity pack answers - Ex or quickset programmer - Baby bunting hoppers crossing car seat fitting - Minimum Wage-Memo - Consider an economy described by the production function - Airasia x a330 seat map - EDU - New heritage doll company simulation solution - Casio fx 82au plus manual - James files bullet casing - 4 pics 1 word basketball players kilowatt meter - Is a rusty nail metallic or nonmetallic - Analysis - Weather - Cost of vort test sa - Dateline secrets on hot springs drive conclusion - Walmart supply chain case study pdf - The four major enterprise applications are - Made in irop country - Several Big Data Visualization tools - Reproductive Disorders - MGT/448: Global Business Strategies. - Plant life cycle graphic organizer - Find the numerator of the equivalent fraction with denominator 12 - Midnight oil concert sydney harbour - Add tsa precheck to existing reservation delta - Which of the following is scalar quantity - Walnut tree surgery doctors - Words with path root - A sea breeze usually originates during the - Information Governance - How to get your homework answers - North lindsey college moodle - Yale cognition and development lab - How to dichotomize variables in spss - An accusation of sexual harassment in pro sports - DURBAN SENIOR PHARMACY +27835179056 MORE [email protected]#$ abortion clinic in stanger inanda kwamashu overport Cleland clarendon bellevve - Julie's pawn & jewelry sales flint mi - Car rental java source code - Apply: Company Brand Commercial | Audio & Video - Francine prose i know why the caged bird - Management - Journalize the april transactions using a periodic inventory system - Policy Analysis Group Assignment - Baby kingdom penrith - Margaret newman theory - C purlins for sale newcastle - How to delete recordings on shaw pvr - Greenwood unity cv2gip installation - A wise man proportions his belief to the evidence - Welch's graham slam pb&j discontinued - What is haccp australia - Company overstepping ethical boundaries for stakeholder agendas - Mis535 midterm answers - GUEST SPEAKER REFLECTION - Physiologically-based drives that are unlearned are called ________ drives. - Csi senses board game instructions - Give me liberty history textbook - Managing xerox's multinational development center case analysis - Energy bar target market - 15 mins in decimal - The enrique camarena case a forensic nightmare questions and answers - Internet ingress egress traffic policy definition - Best bitcoin mining hardware 2020 - Maximizing owners' equity value means carefully considering all of the following except: - What a babysitter charges per hour chemistry pun - Critical thinking Organizational Culture ( Change Management Plans ) - Teenage wasteland anne tyler character analysis - Disscusion - Powerpoint