A perfectly competitive firm faces a price of 10 and is currently producing a level of output at which marginal cost is equal to 10 on a rising portion of its short- run marginal cost curve. Its long- run marginal cost is equal to 12. Its short- run average variable cost is equal to 8. The minimum point on its long-run average cost curve is equal to 10. Is this firm earning an economic profit in the short run? Should it alter its output in the short run? In the long run, what should this firm do?
Answer to relevant QuestionsSame as Problem 6, except nowLTCQ = Q2 + 4QCould any firm actually have this particular LTC curve? Why or why not?In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labor services (a variable input). At its profit-maximizing level of output, the marginal product of labor is equal to ...Name ten elements that you have access to in macroscopic quantities as a consumer here on Earth. Suppose a perfectly discriminating monopolist faces market demand P = 100 - 10Q and has constant marginal cost MC = 20 (with no fixed costs). How much does the monopolist sell? How much profit does the monopolist earn? What ...Suppose we have the same payoff matrix as in Problem 3 except now firm 1 gets to move first and knows that firm 2 will see the results of this choice before deciding which type of car to build.a. Draw the game tree for this ...
Post your question