AutoSave OFF A A CG ... Module_08_Perfect_Competition_Problems - Saved to my Mac OP Home Insert Draw Design Layout References Mailings Review View Table Design Layout ? Tell me Comments Editing Share Cambria (B... v 12 A" A Aa Ap AaBbCcDdEe AaBbCcDdE AaBbCcDdE AaBbCcDdE AaBbCcDdE Paste BI Uvab X X|A DAY Abstract Author Bibliography Body Text Compact Styles Dictate Sensitivity Editor Pane The graph(s) below show cost curves for a firm operating in a perfectly competitive market. Curve 1 represents Marginal Cost (MC), Curve 2 represents Average Variable Costs (AVC] and Curve 3 represents Average Total Costs (ATC). 20 7. Suppose that the equilibrium price is $6.56. This firm is earning Curve a. Profits Price of Oranges ($ Zero Economic Profits (Break-even point) Curve 2 Losses Curve 1 Quantity of Oranges Curve 3 8. Suppose that the equilibrium price is $2. What will this firm Price of Oranges ($) do in the short run? Curve 2 a. Produce. b Exit. Curve 1 Shut down Quantity of Oranges Page 2 of 3 407 words X English (United States) Accessibility: Investigate Focus E + 97%AutoSave OFF A A CG ... Module_08_Perfect_Competition_Problems - Saved to my Mac OP Home Insert Draw Design Layout References Mailings Review View Table Design Layout ? Tell me Comments Editing Share Cambria (B... v 12 A" A Aa Ap AaBbCcDdEe AaBbCcDdE( AaBbCcDdE AaBbCcDdE AaBbCcDdE Paste BIUvab X X|A DAY Abstract Author Bibliography Body Text Compact Styles Dictate Sensitivity Editor Pane Perfect Competition Problem Seti 1. Suppose that the price of Oranges is $4 a bag. In addition, suppose that the firm's total costs are $320 and that the firm currently sells 110 bags of oranges. Given this information, what is this firm's total revenue? Use the following information to answer questions 2 through 5: 2. The table below shows data for the production of avocados for an individual firm operating in a perfectly competitive market. Given this data, complete the table: VALUE - 12 points out of 20 Quantity of Total Total Marginal Marginal Avocados Revenue Costs Revenue (MR) Costs (MC) Profit 0 0 20 10 120 60 20 240 30 30 360 120 40 480 180 50 600 260 60 720 360 70 840 480 80 960 620 NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities! 3. At what quantity does this firm maximize its profit and why? What is marginal revenue at the profit maximizing quantity? What is marginal cost at the profit maximizing quantity? Page 1 of 3 407 words X English (United States) & Accessibility: Investigate Focus E + 97%AutoSave OFF A A CG ... w Module_08_Perfect_Competition_Problems - Saved to my Mac Q OP Home Insert Draw Design Layout References Mailings Review View Table Design Layout ? Tell me Comments Editing Share Cambria (B... v 12 A" A Aa Ap EV EVEVEE AaBbCcDdEe AaBbCcDdE AaBbCcDdE AaBbCcDdE AaBbCcDdE Paste BI Uvab X X|A DAY Abstract Author Bibliography Body Text Compact Styles Dictate Sensitivity Editor Pane The graph(s) below shows cost curves for a firm operating in a perfectly competitive market. Curve 1 represents Marginal Cost (MC), Curve 2 represents Average Variable Costs (AVC) and Curve 3 represents Average Total Costs (ATC). Curve 3 4. First, suppose that the equilibrium price is $21. This firm is earning Price of Oranges ($ Profits Curve 2 Zero Economic Profits (Break-even point) Curve 1 Losses Quantity of Oranges 5. Now, suppose that the equilibrium price is $12. What will happen in this market in the long run? Curve 3 a. New firms will enter. Price of Oranges ($) b No new entry / no exit. Curve 2 Existing firms will exit. Curve 1 Quantity of Oranges 6. Again, suppose that the equilibrium price is $12. What will * Curve 3 this firm do in the short run? a. Produce Price of Oranges ($) Exit. Curve 2 Shut down. Curve 1 Quantity of Oranges Page 2 of 3 407 words X English (United States) & Accessibility: Investigate Focus E + 97%