Plz answer the following 3 mcqs and 1 frq
13, Rice is produced in a perfectly competitive industry. Grand Farm is a typical rm in the rice industry earning a positive economic prot. a. Using correctly labeled side-by-side graphs for the rice industry and Grand Farm, show each of the following in the short run. i. The industry price and quantity, labeled PM and QM ii. Grand Farm's demand curve and marginal revenue curve, labeled DF and MRF iii. Grand Farm's quantity of output, labeled QF iv. Grand Farm's prot, shaded completely b. In the long run, what happens to each of the following? i. The number of rms in the industry. Explain. ii. The equilibrium price; does it increase, decrease, or remain the same relative to PM '? c. Suppose Lori's Quick Eats sells fried rice in a monopolistically competitive fast-food industry. Lori's Quick Eats is earning positive economic prots in the short run. Using a correctly labeled graph for this monopolistically competitive firm, show each of the following in the short run. i. The demand and marginal revenue curves, labeled DL and MRL ii. The marginal cost and average total cost curves, labeled MC and ATC iii. The prot-maximizing price and quantity, labeled PL and QL d. Draw a correctly labeled graph for Lori's Quick Eats in long-run equilibrium showing the demand curve and the long-run average total cost curve. 33. Which of the following statements relating to income elasticity is true? A A positive value for the income elasticity coefficient indicates an inferior good. B If good X and good Y have negative income elasticities, then both goods are substitutes. C With an income elasticity coefficient of 0.6, the demand is inelastic and the good is an inferior good. With an income elasticity coefficient of 5, a 10 percent increase in income will lead to a 50 percent increase D in the quantity demanded of the good. With an income elasticity coefficient of -1.2, a 10 percent increase in income will lead to a 12 percent E decrease in the price of the good.47. Which of the following statements about the market supply curve is true? An increase in input prices will shift the market supply me to the right. At each price, a horizontal summation of the quantity supplied by each firm will yield the market supply ctn've . (9 At each quantity supplied, a vertical summation of the price set by each rm will yield the market supply curve . G) A decrease in the price will shift the market supply curve to the left. (9 The law of supply states that the market supply curve may shift right, shift left, or remain the same as the price increases. 48. Price, Cost Quantity Based on the information in the above graph describing a monopolistically competitive rm, which of the following is the'? The firm is productively efficient since marginal cost intersects average cost at the minimum of average A cost. B When maximizing profits, this firm will have economic losses but will still continue to produce. The firm will produce where marginal revenue equals marginal cost and will set its price to equal average C total cost. D With the firm making economic profits, it can be expected that new firms will enter this market. E The firm will produce where demand is inelastic to capture all economies of scale
