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A: Answer in Step 2
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Q: xplanations.
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Q: 1. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of…
A: The typical cost functions are given in the next step.
3. What is the meaning of ‘acceptable loss’ for a
Draw a graph and explain.
4. How can we increase the Total Revenue of products by using elasticity ?
Explain them briefly.
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- 3 The graph below shows the costs and revenue curves for Dollar-Daze, a typical profit-maximizing firm in a perfectly competitive market producing Good X. Answer the following questions based on the graph below d. As the market for Good X moves into the long-run equilibrium, explain what will happen to the price of Good X and why.e. Assume the cross-price elasticity of demand between Good X and Good B is positive, what will happen to the quantity demanded of Good B given the change in the long-run price of Good X in part (d)?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.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?
- a. Graph a purely competitive market showing the point of equilibrium at a price of $150 and a total product of 400,000. b. Next to this graph, graph the purely competitive firm. What price will the firm charge for the product? Will they charge $150, less than $150, or more than $150? c. Show the demand, average revenue, and marginal revenue curve on the graph for the firm. d. Show the profit maximizing quantity for the firm at 250 units of output, or tp. e. Show this firm making a profit of $5,000, making sure to solve for the numerical value for the ATC at the quantity, or tp, of 250, and showing the profit area on the graph.6. A-One bakery in Brampton sells 350 fruit cakes slices each month for $3.25 each. They are looking for help to come up with a strategy to increase revenue. A student from our school who works their part time conducts a survey. The results of the survey indicate that sales of the fruit cake slices would increase by 80 per month for each $0.10 decrease in price. c. Determine the marginal revenue from the sales of 200 slices of fruit cake. d. The cost of producing x fruit cake slices is C(x) = -0.0005x² + 1.5x + 300. Determine the marginal cost of producing 200 fruit cake slices.Co Assignment Content 1) When the Price is $4 the quantity supplied of hats is 100. If the price changes to $6 dollars and the quantity supplied changes to 400, is the elasticity of supply elastic, inelastic or unit elastic? How did you reach that conclusion? 2) Why will economic profits for firms in a perfectly competitive industry tend to vanish in the long run? What about accounting AS 12
- There are several pen manufacturers in Corinthia. However, the pens sold by each manufacturer have a unique design. How will the demand for pens faced by the existing pen manufacturers in Corinthia be affected if new firms enter the industry in the long run? a. The demand curve faced by the existing firms will become perfectly elastic. b. The demand faced by the existing firms will decrease. c. The demand curve faced by the existing firms will become perfectly inelastic. d. The demand faced by the existing firms will increase.3. Johnny Rockabilly has just finished recording his latest CD. His record company's marketing department determines that the demand for the CD is as follows: Price Number of CDs $24 10 000 22 20 000 20 20 30 000 18 40 000 16 50 000 14 60 000 The company can produce the CD with no fixed cost and a variable cost of $5 per CD. a. Find total revenue for quantity equal to 10 000, 20 000, and so on. What is the marginal revenue for each 10 000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would be the price? What would be the profit? c. If you were Johnny's agent, what recording fee would you advise Johnny to demand from the record company? Why?b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. False True
- Answer the following questions based on the accompanying graph. Price ATC MC $50 $28 $18 MR 50 75 Quantity a. What are the profit-maximizing price and quantity? b. At the profit-maximizing price and quantity, what are the total profits or losses made by this firm?1. The market for manicures and other nail treatments is very competitive. How would the following developments affect the number of nail treatments that a typical nail salon wants to supply in the short run? a. Heightened concern about their appearance causes people to want more manicures at a given price. b. The government requires all nail salons to pay a new yearly licensing fee to operate. c. Worse job prospects elsewhere in the economy cause more people to want to become manicurists, causing the wages of manicurists to fall.Assume that the market for pasta is in long-run equilibrium and that the pasta industry is a constant-cost industry. Explain with a graph and words what will happen to the price and quantity in the market when the demand for pasta decreases.
