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16 Nov 2018

The diagram below shows supply, demand, and quantity exchanged of Monday matinee movie tickets. Assume it is a perfectly competitive market. Price (8) 10 125 TTT 20 30 40 50 60 70 80 90 100 Quantity FIGURE 12-3 36) Refer to Figure 12-3. What is the total economic surplus generated in this market at the allocatively efficient level of output? A)$5 B) $10 C)$125 D) $250 E) $500

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Reid Wolff
Reid WolffLv2
18 Nov 2018
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Related questions

The diagram below shows supply, demand, and quantity exchanged of Monday matinee movie tickets. Assume it is a perfectly competitive market. Price ($) 10 20 30 40 50 60 70 80 90 100 Quantity FIGURE 12-4 22) Refer to Figure 12-4. What is the value of the producer surplus generated in this market at the free-market equilibrium? A) $0 B) $5 C) $10 D) $125 E) $250

I have done the charts can any one help me with the questions below.
c. Determine the profit maximizing level of output. Explain how you arrived at that conclusion.
d. What is the total profit at the profit maximizing level of output? How does that compare to profit at other levels of output?
e. What is the lowest price that Winsome Widgets will accept and continue to produce in the short run? Explain.
f. Is Winsome Widgets in long-run equilibrium? Explain

Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget.
0
10
20
30
40
50
60
70
80
90
100

Total Fixed Cost
100
100
100
100
100
100
100
100
100
100
100











Total Variable Cost
0
50
80
100
140
200
275
375
500
650
900

Total Cost
$100
150
180
200
240
300
375
475
600
750
1,000
Average Fixed Cost
n/a
10
5
3.33
2.5
2
1.67
1.43
1.25
1.11
1

Average Variable Cost
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9

Average Total Cost
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9

Marginal Cost
n/a
50
30
20
40
60
75
100
125
150
250

Total Revenue
0
60
120
180
240
300
360
420
480
540
600

Marginal Revenue
n/a
60
60
60
60
60
60
60
60
60
60

Total Profit
-100
-90
-60
-20
0
0
-15
-55
-120
-210
-400

T Fixed Cost
100
100
100
100
100
100
100
100
100
100
100

Variable cost
50
80
100
140
200
275
375
500
650
900

AFC
n/a
10
5
3.33
2.5
2
1.67
1.43
1.25
1.11
1


AVC
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9


AVC
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9


MC
n/a
50
30
20
40
60
75
100
125
150
250



TR
0
60
120
180
240
300
360
420
480
540
600



MR
n/a
60
60
60
60
60
60
60
60
60
60



TP
-100
-90
-60
-20
0
0
-15
-55
-120
-210
-400
c. Determine the profit maximizing level of output. Explain how you arrived at that conclusion.
d. What is the total profit at the profit maximizing level of output? How does that compare to profit at other levels of output?
e. What is the lowest price that Winsome Widgets will accept and continue to produce in the short run? Explain.
f. Is Winsome Widgets in long-run equilibrium? Explain

1.

In a perfectly competitive market, in the long run, the marginal cost of a firm becomes equal to its minimum average total cost.

A) True
B) False

2.

Generally, The price a firm charges for its product is equal to its total revenue divided by the number of units sold.

A) True
B) False

3.

In a perfectly competitive firm to maximize profit a firm must make sure that the price it charges does not exceed its marginal cost.

A) True
B) False

4.

Firms in a competitive market can never make economic profits while they may make biasness (accounting) profits.

A) True
B) False

5.

When a perfectly competitive firm is making a positive economic profit its average revenue must be greater than its average total cost.

A) True
B) False

6.

To maximize its profit a firm always produces at the quantity level where it can charge the highest price and earn the greatest revenue; this strategy is consistent with setting is MC equal to price.

A) True
B) False

7.

When a firm in a competitive market is making a positive economic profit its business profit may be positive or negative.

A) True
B) False

8.

In a perfectly competitive market new entries could result in increases in input prices thus making production costs go up.

A) True
B) False

9.

In a perfectly competitive market, in the long run, each firm produces the maximum amount it can produce and charges the lowest price possible. That is why we consider competitive markets efficient.

A) True
B) False

10.

A monopolist always under-produces and charges a price higher than its MC.

A) True
B) False

11.

As the only supplier in the market a monopolist can charge any price it wishes and buyers have no choice but to pay.

A) True
B) False

12.

The marginal revenue is the additional revenue generated by the last unit of labor hired.

A) True
B) False

13.

The price a monopolist charges may or may not be above its average cost but it is always above its MR.

A) True
B) False

14.

When demand curve is a downward-sloping straight line (linear) marginal revenue will be greater than MC at all output leveles.

A) True
B) False

15.

By setting its MR equal to its MC a monopolist determines the output that would maximize its profit.

A) True
B) False

16.

In the long run each competitive firm would produce at the quantity level where its MC is equal to its MR as well as its ATC.

A) True
B) False

17.

A monopoly always makes an economic profit.

A) True
B) False

18.

When a monopoly's ATC is equal to the price it charges it is making normal economic profits.

A) True
B) False

19.

When a monopoly is making a zero economic profit still its MR>ATC.

A) True
B) False

20.

An increase in demand would enable a monopolist to raise its price while reducing its output.

A) True
B) False

21.

The market supply curve in an increasing-cost industry is:

A) a. upward sloping
B) b. downward sloping
C) c. vertical
D) d. horizontal
E) e. none of the above

22.

The total producer surplus is measured by:

A) a. the area between supply and demand curves.
B) b. the difference between the price the consumer is willing and able to pay and the price suppliers wish to charge to maximize their profits.
C) c. the area between the price consumers actually pay and the demand curve.
D) d. the area between the equilibrium market price and the supply curve.
E) e. the consumer willingness to pay as reflected by the equilibrium market price.

23.

. Economists measure economic (social) welfare by the

A) a. net consumer surplus
B) b. sum of consumer and producer surplus
C) c. sum of the net profits made by the industry's competitive firms
D) d. price consumers are willing to pay for one additional unit of a good
E) e. difference between the total consumer surplus and total producer surplus

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