all T-Mobile 6:52 PM 24% 11. A perfectly competitive firm sells its output for $
ID: 1125582 • Letter: A
Question
all T-Mobile 6:52 PM 24% 11. A perfectly competitive firm sells its output for $100 per unit and marginal cost is $100 per unit. To maximize short run profit, the firm should 12. In economics, we say that a perfectly competitive firm maximizes profit or minimizes losses in the short-run by producing at the output level at which: 13. In the short run, if a perfectly competitive firm is producing at a price above average total cost (per unit cost), its economic profit must be 14. A perfectly competitive firm's short-run supply curve is the 15. In the long-run equilibrium, the typical competitive firm has no incentive to 16. The long-run is a planning period 17.Monopoly is a market structure characterized by aExplanation / Answer
11. First, this is a perfect competition. The firm sells at the price of $100. Its MC is also $100. Lets see what we can infer here. In perfect competition, MR equals AR which is the price at equilibrium.It is in equilibrium when MC meets MR. Here, we know that AR is $100 and MC is also $100. The firm can optimise profits when its MC and MR are at $100. To maximise profits, firm should produce where the MR is at $100.
12. In a perfectly competitve market, firms are price takers. They cannot influence the price in the market. They can only accept the infustry price. These firms can earn maximum profits or minimise loss only at equilibrium and this is when the MC and MR is equal.
13. Economic profit is any surplus that the firm earns above the average cost. It is the difference between average cost and average revenue. Its economic profit is all the area between the AC and AR for the quantity produced.
14. In short run, the firms suplly curve is nothing but their supply curve. This is because the MC curve shows how much each additional unit costs the firm to produce and the same is the price the firm would like to get as minimum in the market for the output produced. It is hence an upward sloping curve.
15. In long run, a perfect competitve firm will have no incentive to leave the industry. It will continue to make normal profits and enjoy its output and existence.
16. The long run is the planning period because only in long run is all the factors variable. In short run, only one factor can be varied and this affects the firm's capacity to quickly increase the production. In long run, since all the factors can be changed, the firm can plan to meet any level of market demand.
17. Monopoly is a market structure characterised by a single seller. He determines the price level or the output in the market and has the power to even charge different prices to different sections of the society.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.