2 woL.01, In the market for paper,the demand for paper decreases in the short ru

Question

2 woL.01, In the market for paper,the demand for paper decreases in the short run. The top table shows the new market demand schedule for paper Price Quantity demanded dollars per box) (thousands of boxes per week) 2.95 4.13 5.30 6.48 7.65 8.83 10.00 450 400 350 300 250 200 Quantity Marginal cost Average Average (boxes per (dollars per variable cost total cost week) additional box) 200 250 300 350 400 450 500 6.40 7.00 7.65 8.40 10.00 12.40 20.70 dollars per box) 7.80 7.00 7.10 7.20 7.50 8.00 9.00 12.80 11.00 10.43 10.06 10.00 10.22 11.00 The market is perfectly competitive and each firm has the costs shown in the bottom table when it uses its least-cost plant size. There are 1,000 firms in the market. The market price is A. $8.40; incurs an economic loss of S581 B. $8.83; incurs an economic loss of S542.20 a week C. $10.00; makes normal profit D. $7.65; incurs an economic loss of $834 a weck a box, and each firm . 3 (W9LO2). Firms in a competitive market are making an economic profit. Choose the statement that describes what might happen next. A. New firms enter, supply decreases, and the price rises until in the l economic profit. Market output increases and the output of each individual firm decreases. long run all firms are making greater I in the long run all firms are making zero profit. Market output increases and the output of each individual firm decreases. C. Some firms exit, supply decreases, and the price rises until in the long run all firms are making economic profit. Market output decreases and the output of each individual firm decreases. D. Some firms exit, supply increases, and the price falls until in the long run all firms are making zero profit. Market output increases and the output of each individual firm increases. greater

Explanation / Answer

Question 2). Answer :- Option D). $ 7.65; incurs an economic loss of $ 834 a week.

Question 3). Answer :- Option B). New firms enter, supply increases, and the price falls untill in the long run all firms are making zero profit. Market output increases, and the output of each individual firm decreases.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.