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- Using graph, explain when the firm in a competitive market is in equilibrium?Think about a competitive market in which youparticipate regularly. For each of the characteristicsof a competitive market, explain how your marketmeets these requirements.2. Ralph opened a small shop selling bags of trail mix. The price of the mix $5 and the market for trail mix is very competitive. Ralph's curves are shown in the figure bellow. Price $8 7 6 5 2 MC AC 2 4 6 8 10 12 14 16 18 20 22 24 Quantity a. At what quantity will Ralph produce? Why? b. When the price is $5, shade the area of profit or loss in the graph provided and calculate Ralph's profit or loss (round up).__ c. If all other sellers of trail mix have the same marginal and average costs as Ralph, should he expect more or less competition in future? In the long run, will the price of trail mix rise or fall? What will be the price of trail mix in the long run? Price will rise/fall in the LR. Price in the LR will be $
- JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)Price $3 2 10,000 20,000 30,000 S D Quantity Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. producers should lower the price to $1 in order to sell the quantity demanded of 10,000.at the optimal output , what price will do drop in chrge and what will be its output?Price $ Output in units Also at the optimal price and output , what will be its total revenue, total cost and total lost .Please calculate the points on the graph. Please provide solution
- explain your answers in detail and use graphs whenever appropriate: The market for rental cars is very competitive. How would the following developments affect the quantity of car rentals that a typical rental car company wants to supply in the short run? a. With the easing of fears about Covid 19, people are more excited to travel than before. b. Local governments reduce the yearly fee that rental car companies have to pay for their facilities. Note, these fees do not vary with how many cars the company rents. c. Rental car companies have to pay higher wages for their workers. Suppose that initially the market for rental cars is in long-run equilibrium. a. What does the fall in the yearly fee rental car companies have to pay for their facilities do to the profits of a typical rental car company in the short run? b. What will happen to the equilibrium price and quantity of rental cars in the long run? Why? What will happen to the profits of a typical rental car company in the long run?Is a competitive market “efficient”? Define efficiency and explain.which market has free entry
- Sally runs a vegetable stand The following table shows two points on the demand curve for the heirloom tomatoes she sells Price Quantity demanded per week $4.00 100,000 200,000 $2.75 Sally's marginal revenue from lowering the price of tomatoes from $4.00 to $2. 75 is S (Enter your response rounded to two decimal places) Lowering the price trom $4 00 to $2 75 results in an output effect of $and a price effect of S (Enter your responses as whole numbers and include a minus sign i necessary)The total revenue of a fimm decreased after an increase of the price of the goods it sells. Explain why this can happen. Include a graph in your explanation. Indicate price effect and output effect in your graph.What kind of business is a water refilling station? What problems are solved with the help of a water refilling station and how? How does a water refilling station fit in the competitive market?