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Consider a Competitive Industry and a Price-Taking Firm That Produces

Question 8

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Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 Supply: Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 where Q is quantity,P is the price of the product,M is income,and Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 for 2015: Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 The manager also estimates the average variable cost function to be Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________. A) should; $3 > $0.975 B) should; $2.75 > $0.75 C) should not; $2 < $2.15 D) should not; $0.50 < $1.00 Total fixed costs will be $2,000 in 2015.The manager _____ produce since _____________.


A) should; $3 > $0.975
B) should; $2.75 > $0.75
C) should not; $2 < $2.15
D) should not; $0.50 < $1.00

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