Short-Run Decision to Produce UltimateReviewPacket.com Part 1: Check Your Understanding- Use the graph to calculate the following. Assume this firm is in a perfectly competitive market. Price $60 $50 $40 $30 $20 $10 MC ATC 0 2 4 6 8 10 12 Quantity 1. Total review when the price is $40. * Your answer This is a required question 2. Total profit when the price is $40. * Your answer This is a required question 1 point 1 point 3. Total review when the price is $25. * Your answer This is a required question 4. Total profit when the price is $25. * Your answer 5. At the price of $25, should this firm produce the profit maximizing quantity or shut down in the short-run? Explain. Your answer 1 point 1 point * 1 point Part 2 Chart Practice Part 2 - Chart Practice-Assume that you also sell homemade bracelets for $12 each. Use the chart and answer the questions. Quantity Total Marginal Total Revenue Revenue Cost Marginal Cost 0 $20 1 $18 2 $22 3 $30 4 $40 5 $55 6 $75 Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license 11. Assume that the price of bracelets increased to $16. What is the profit maximizing quantity? Your answer * 1 point 12. Calculate your total revenue at the new profit maximizing quantity. Show * 1 point your work. Your answer 13. Calculate your profit at the new profit maximizing quantity. Show your work. Your answer * 1 point 1. Lindo Coffee is a typical coffee bean producer and is currently making a loss. Draw graphs for the coffee bean market and for Lindo Coffee. Label the equilibrium price and quantity P1 and QM1 and the quantity for the firm QF1. * Add file 2. On the graph, show what will happen to the market and firm in the long- run. Add file 1 poin *1 poin Part 2 - More Practice Part 2: More Practice- Assume that coffee beans are produced in a perfectly competitive market. 3. Green Mountain is a typical coffee bean producer and is earning a normal * 1 point profit. Draw graphs for the coffee bean market and for Green Mountain. Label the equilibrium price and quantity P1 and QM1 and the quantity for the firm QF1. Add file 4. Assume that the popularity of coffee rises. On the graph from question #3, show the effect of the increase in demand on the market price and quantity in the short run. Label the equilibrium price and quantity P2 and QM2, respectively. Add file 5. On the graph from question #3, show the effect of the increase in the demand for coffee on Green Mountain's quantity of coffee in the short run. Label the equilibrium quantity for the firm QF2. * 1 poin * 1 poin 6. As a result of this change in the market, will firms enter or exit in the market in the long run? Explain. 1 poin Your answer 7. Assume that coffee beans are produced in a constant-cost industry. Would the new long-run equilibrium price increase, decrease, or stay the same as the original price before the increase in demand? Explain. Your answer 8. Assume that coffee beans are produced in an increasing-cost industry. Would the new long-run equilibrium price increase, decrease, or stay the same as the original price before the increase in demand? Explain. Your answer * 1 point * 1 point