Perfect competition. 4 questions attached in the document.
Homework Assignment #6
Perfect Competition Chapter 9
Complete Questions 2, 3, 9, and 14 from the review questions on chapter 9 posted in your chapter 9 Content Folder and reprinted below.
When you upload your answers, DO NOT upload the homework instructions and you DO NOT need to upload the questions. It is time-consuming to read through to find where your answers begin for every question.
All homework should be typed.
All homework should include your name, the course name, number, and section on the top of the first page.
All homework should include the assignment number (homework assignment #4) on the top of the first page.
No credit will be given for homework not prepared as directed.
Answers should be explained completely. Students should write out answers in complete sentences. Please show all of your work.
Students will be assessed in terms of their ability to express economic concepts in writing. Written homework assignments therefore need to exhibit “good” writing skills. Poorly written homework answers will negatively affect your grade.
I do not accept homework via email.
To receive course credit and/or a letter grade over 75% of the homework assignment must be completed.
2. Why is a perfectly competitive firm considered a price taker?
What is the profit maximizing/loss minimizing rule a firm follows in determining how much to produce in the short run?
Given GRAPH B, answer the following questions. Support your answer by showing all of your work or clearly stating what you are attempting to derive and why. Explain your answers.
What is the profit maximizing output level and price?
What is the total revenue for this firm?
What are the total costs for this firm?
What are the profits or losses for this firm?
Below what price will this firm shut down?
Between what range of prices will this firm be minimizing losses by continuing to operate?
What is the total fixed cost (TFC) for this firm?
COMPLETE THE FOLLOWING TABLE:
Assume the Price = $25
| Total | QUANTITY | MPPl | WAGE | TFC | TVC | TC | MC | AFC | AVC | ATC | P=MR Where MR = ∆TR/∆Q | Total Revenue TR =P*Q |
| Variable | Total | Marginal | RATE | total fixed | total variable | total | marginal | average fixed | average | average | ||
| Input | Physical | Physical | per day | cost | cost | cost | cost | Cost | variable cost | total cost | ||
| (Labor) | Product | Product (labor) MPL = ∆Q/∆L | per worker | TVC= (w*L) | TC = (tfc+tvc) | ATC = ∆tc/∆q | AFC = tfc/q | AVC = tvc/q | ATC = tc/q | Where MR = ∆TR/∆Q | TR =P*Q | |
| 0 | 100 | 300 | 300 | -- | -- | -- | -- | --- | ||||
| 1 | 100 | 300 | ||||||||||
| 2 | 100 | 300 | ||||||||||
| 3 | 17 | 100 | 300 | |||||||||
| 4 | 22 | 100 | 300 | |||||||||
| 5 | 26 | 100 | 300 | |||||||||
| 6 | 27 | 100 | 300 |
Assume this is a perfectly competitive market structure
Assume the price is equal to $25.
What is the profit maximizing – loss minimizing price?
What is the profit maximizing – loss minimizing output level?
What is total revenue?
What is total cost?
What is the firm’s per unit profit/loss?
What is the firm’s total economic profit/loss?
Should the firm continue to produce in the short run or shut down?
