03 Jun Question Complete Session 4 questions and upload answers as a Word docum
Question
Complete Session 4 questions and upload answers as a Word document.
1. Technical Questions 1, 2, 3, and 5 at end of Ch. 7.
2. Application Questions 1, 3, and 5 at end of Ch. 7.
Technical Questions
1. For each of the following graphs, identify the firm’s profit-maximizing (or loss-minimizing) output. Is each firm making a profit? If not, should the firm continue to produce in the short run?
2.Consider a firm in a perfectly competitive industry. The firm has just built a plant that cost $15,000. Each unit of output requires $5 worth of materials. Each worker costs $3 per hour.
a. Based on the information above, fill in the table on the following page.
b. If the market price is $12.50, how many units of output will the firm produce?
c. At that price, what is the firm’s profit or loss? Will the firm continue to produce in the short run? Carefully explain your answer.
d. Graph your results.
3. The following graph shows the cost curves for a perfectly competitive firm. Identify the shutdown point, the breakeven point, and the firm’s short-run supply curve.
5Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium
a. How do you know that the industry is in longrun equilibrium?
b. Suppose that there is an increase in demand for this product. Show and explain the short-run adjustment process for both the firm and the industry.
c. Show and explain the long-run adjustment process for both the firm and theindustry. What will happen to the number of firms in the new long-run equilibrium?
Application Questions
1.
1. Discuss how the facts in the opening case study and the subsequent discussion of the potato industry illustrate the lack of control over prices by individual potato producers in a competitive market, the response to high prices predicted by the model of perfect competition, and the attempts by producers in a competitive market to gain control over price. Check recent business publications to find out how successful the United Potato Growers of America cooperative has been since the time of this chapter’s case study.
3 The following facts characterize the furniture industry in the United States.
a. The industry has been very fragmented, so that few companies have the financial backing to make heavy investments in new technology and equipment.
b. In 1998, only three U.S. furniture manufacturers had annual sales exceeding $1 billion. These firms accounted for only 20 percent of the market share, with the remainder split among 1,000 other manufacturers.
c. Capital spending at one manufacturer, Furniture Brands, was only 2.2 percent of sales compared with 6.6 percent at Ford Motor Company. Outdated, labor-intensive production techniques were still being used by many firms.
d. Furniture manufacturing involves a huge number of options to satisfy consumer preferences, but this extensive set of choices slows production and raises costs.
e. Small competitors can enter the industry because large manufacturers have not built up any overwhelming advantage in efficiency.
f. The American Furniture Manufacturers Association has prepared a public relations campaign to “encourage consumers to part with more of their disposable income on furniture.”
g. In fall 2003, a group of 28 U.S. furniture manufacturers asked the U.S. government to impose antidumping trade duties on Chinese-made bedroom furniture, alleging unfair pricing.
h. The globalization of the furniture industry since the 1980s has resulted from technological innovations, governmental implementation of economic development strategies and regulatory regimes that favor global investment and trade, and the emergence of furniture manufacturers and retailers with a capacity to develop global production and distribution networks. The development of global production networks using Chinese subcontractors has accelerated globalization in recent years. Discuss how these facts are consistent with the model of perfect competition
5In a perfectly competitive industry, the market price is $25. A firm is currently producing 10,000 units of output, its average total cost is $28, its marginal cost is $20, and its average variable cost is $20. Given these facts, explain whether the following statements are true or false: a. The firm is currently producing at the minimum average variable cost.
b. The firm should produce more output to maximize its profit.
c. Average total cost will be less than $28 at the level of output that maximizes the firm’s profit.
Hint: You should assume normal U-shaped cost curves for this problem.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.