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Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   Now consider the transition from the short run to the long run. We’ll assume that in the long run many firms identical to the one depicted can enter or exit the market freely. What best describes the transition from the short run to the long run?

Information for questions 13-19 The following figure shows the cost curves for a firm in a perfectly competitive market. Only exact answers are accepted. For numeric questions, enter 0, if the question cannot be answered with the information provided. In particular, since the figure does not have a grid, do not try to approximate any numbers using its scale. You can only use the numbers provided on the figure to perform an exact calculation. If you feel that an exact calculation is not possible for a given question, then the correct answer would be 0, or “none of the above.”   The last three questions in this group assume that we have reached the long-run equilibrium, following the process of the previous question. In particular, we’ll assume that the free entry or free exit of firms has stopped, the market is in equilibrium, and demand is sufficient to accommodate many (>100, say) firms.   In the long-run equilibrium, what is the market price?

Information for questions 13-19 The following figure shows the cost curves for a firm in a perfectly competitive market. Only exact answers are accepted. For numeric questions, enter 0, if the question cannot be answered with the information provided. In particular, since the figure does not have a grid, do not try to approximate any numbers using its scale. You can only use the numbers provided on the figure to perform an exact calculation. If you feel that an exact calculation is not possible for a given question, then the correct answer would be 0, or “none of the above.”   For the first three questions in this group, the firm is operating in the short run.   For the firm to operate in the short run (that is, for it not to shut down), the market price must larger than or equal to:

Information for questions 2-4 The following are some equations that may be useful for this group of questions. The third equation assumes that we graph isoquants and isocost lines with labor on the horizontal axis, and capital on the vertical axis. Marginal Product of Labor:

Information for questions 13-19 The following figure shows the cost curves for a firm in a perfectly competitive market. Only exact answers are accepted. For numeric questions, enter 0, if the question cannot be answered with the information provided. In particular, since the figure does not have a grid, do not try to approximate any numbers using its scale. You can only use the numbers provided on the figure to perform an exact calculation. If you feel that an exact calculation is not possible for a given question, then the correct answer would be 0, or “none of the above.”   For the first three questions in this group, the firm is operating in the short run.   For the firm to make positive profits, the market price must exceed:

Information for questions 29-33 Suppose that demand for a monopolist is given by Q = 4000 – 500 P. The monopolist’s total cost function is given by C = 180 + 5.5Q + Q2/2000. Calculate the monopolist’s profit. Only exact answer accepted. Enter 0, if the answer cannot be obtained with the information given.

Information for questions 34-40 The figure shows the Demand curve for a monopoly. This monopolist has no fixed cost, and a constant Marginal Cost = 0.5 (the Marginal Cost curve is also shown). Note that one horizontal grid space = 5 units, while one vertical grid space = $0.25. For all numeric questions, only the the exact answer will be accepted. Adhere to the following convention, which is necessary to get exact answers: if a line seems to cross an intersection of the grid, then by convention assume that it does. For example, the choke point of the demand curve seems to be where P=3, Q=0, so assume that that is the exact choke point, that is, that when the price P=3, then the demand is Q=0, exactly. If a question cannot be answered with the information given, enter the number 0.   Calculate the total profit that the monopolist makes. Note: if the total profit is a loss, enter a negative number.

Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   How many units will the firm produce, if it does not shut down?

Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided. The last three questions in this group assume that the market has reached the long-run equilibrium. In particular, we’ll assume that the free entry or free exit has stopped.   In the long-run equilibrium, what is the market price?

Information for questions 10-12 A firm’s short-run total cost function is given by C=550 + 300 Q + 10 Q2. Capital is the only input that is fixed in the short run, that is, it cannot be changed in the short run. Labor, on the other hand, is variable, and can be changed in the short run. The rental rate is $25 per unit of capital, the wage is $50 per unit of labor. For this group, answers within 1% of the correct answer are accepted, so carry several decimals in your calculations. Enter 0 if the question cannot be answered with the information provided.   Suppose that the answer to the previous question was Q=12.56. How much is the firm’s minimum Average Cost?