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Wk 4 - Apply Summative Assessment The Microeconomics of Product

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  • Microeconomics
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  • Microeconomics

What are the likely reason(s) that the market for electricity is not perfectly competitive? Select all that apply. check all that apply  It is difficult to enter or exit the industry as a supplier.  Electricity is not a standardized (homogeneous) product.  There are few buyers in the ...

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  • June 1, 2023
  • 9
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

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  • week 4 apply summative assessment the microeconomics of product
  • what are the likely reasons that the market for electricity is not perfectly competitive select all that apply check all that appl

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  • Microeconomics
  • Microeconomics

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1.
What are the likely reason(s) that the market for electricity is not perfectly competitive? Select all that apply. check all that apply
It is difficult to enter or exit the industry as a supplier.
Electricity is not a standardized (homogeneous) product.
There are few buyers in the market.
There are few sellers in the market.
Producing electricity requires high start-up costs for power plants and power lines. This will prevent companies from entering the market. In addition, the government usually issues permits to sell electricity (and usually only to one company in a region). 2.A perfectly competitive producer is
rev: 06_26_2018
Multiple Choice
both a "price maker" and a "price taker."
neither a "price maker" nor a "price taker."
a "price taker."
a "price maker."
3.The marginal revenue curve faced by a perfectly competitive firm
rev: 06_26_2018
Multiple Choice
lies below the firm's demand curve.
is downward sloping, because price must be reduced to sell more output.
is horizontal at the market price.
has all of these characteristics.
Wk 4 - Apply: Summative Assessment: The Microeconomics of ProductThis study source was downloaded by 100000850872992 from CourseHero.com on 06-01-2023 00:20:52 GMT -05:00
https://www.coursehero.com/file/161199620/Wk-4-Apply-Summative-Assessment-The-Microeconomics-of-Productdocx/ 4. The table below shows the total cost (TC) and marginal cost (MC) for Baker Street, a perfectly competitive firm producing different quantities of apple pies. The market price of apple pies is $5.00 per pie. a. Fill in the marginal revenue (MR) and average revenue (AR) columns. Instructions: Round your answers to two decimal places. Baker Street's Costs and Revenues
Quantity (apple pies)TC (dollars)MC (dollars)MR
(dollars)AR
(dollars)
10$65.00$4.00$ $ 15 82.50 3.50 20 102.50 4.00 25 127.50 5.00 30 162.50 7.00 35 207.50 9.00 Instructions: Enter your answers as a whole number. b. At the market price of $5.00 per apple pie, how many apple pies should Baker Street make? apple pies c. If the market price for apple pies were to rise to $7.00 per apple pie, how many apple pies should Baker Street make? apple pies
a. Since the apple pie market is assumed to be a competitive market, a supplier can sell any quantity for the market price of $5.00. If a supplier increases the quantity sold by one unit, revenue will increase by the price this unit is sold
for, which is the market price of $5.00. Therefore, marginal revenue is also $5.00. Average revenue is the average revenue per unit sold, and is calculated as total revenue divided by quantity. b. Baker Street reaches a profit maximum when MR = MC. The MR and MC curves intersect at a quantity of 25. Therefore, Baker Street maximizes profits when producing a quantity of 25 apple pies. c. If the market price rises to $7.00, MR equals $7.00. This is because now every additional unit can be sold for $7.00. The new MR curve could be graphed as a horizontal line at $7.00. This line would intersect with MC at a quantity of roughly 30 units. At this quantity, MC equals the new MR and thus profits are maximized.
5.The graph below depicts the revenue and cost curves for Pike's Flower Shop.55
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30Wk 4 - Apply: Summative Assessment: The Microeconomics of ProductThis study source was downloaded by 100000850872992 from CourseHero.com on 06-01-2023 00:20:52 GMT -05:00
https://www.coursehero.com/file/161199620/Wk-4-Apply-Summative-Assessment-The-Microeconomics-of-Productdocx/

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