Refer to the following figure. Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $400 per day and rental rate per unit of capital is $1,000 per day. The firm’s isocost line at the current expenditure level is represented by

Suppose that the inverse demand in a market is P = 100 – 2Q. A firm’s marginal cost is constant and equal to $50. If the marginal cost increased from $50 to $60 and the firm is a monopoly, then it would raise its price _____. If the marginal cost increased from $50 to $60 and the firm operates in a perfectly competitive market, then the market price would _____.

The demand and supply of detergent are given by QD = 7,000 – 1,000P and QS = 1,000P – 1,000, where P is price per gallon and Q is in gallons. What happens at a price ceiling of $2 per gallon?

A firm is producing 8 units of output at an average total cost of $40. When the firm produces 9 units of output, average total cost rises to $54. What is the marginal cost of the 9th unit of output?

In a perfectly competitive industry, the equilibrium price is $10, and the minimum average total cost of the industry’s firms is $20. If this is a constant-cost industry, we can expect that in the long run, firms will _____ the market, shifting the industry’s short-run supply curve _____.

In the market for apartment rentals, the demand and supply equations are given by QD = 5,000 – 3P and QS = 5P + 1,000, where P is the price per apartment and Q measures the quantity of apartments. What is the equilibrium quantity?

A firm is producing 4 units of output at an average total cost of $10. When the firm produces 5 units of output, average total cost rises to $20. What is the marginal cost of the fifth unit of output?

If a firm has market power but cannot prevent its customers from reselling the product, then the firm will

Suppose the supply curve for backpacks is Q = 2P – 36. What is the highest price at which no producer is willing to sell backpacks (i.e., the supply choke price)?

In the market for apartment rentals, the demand and supply equations are given by QD = 9,000 – 2P and QS = 3P + 1,000, where P is the price per apartment and Q measures the quantity of apartments. What is the equilibrium quantity?