Lumen OHM Assessment

Question 1

The graph below shows cost curves for a firm operating in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 8, vertical axis: 0 to 29. Start Graph, Color black

x	y
0	9
1	9
2	9
3	9
4	9
5	9
6	9
7	9
8	9

Start Graph, Color blue

x	y
0	19
1	16
2	15
3	16
4	19
5	24
6	31
7	40

Start Graph, Color red

x	y
0	19
1	14
2	15
3	22
4	35

Start Graph, Color green

x	y
1	35
2	24.5
3	22.333
4	23.75
5	27.8
6	34.167
7	42.714

Label "Quantity of Bags" at pixel coordinates (175,0).Label "Price of Bags" at pixel coordinates (0,170).

Suppose that the equilibrium price is $9 (black line). This firm is earning

Profits
Zero Economic Profits (Break-even point)
Losses

Hint

Question 2

The graph below shows cost curves for a typical firm operating in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 8, vertical axis: 0 to 23. Start Graph, Color black

x	y
0	19.28
1	19.28
2	19.28
3	19.28
4	19.28
5	19.28
6	19.28
7	19.28
8	19.28

Start Graph, Color blue

x	y
0	13
1	10
2	9
3	10
4	13
5	18
6	25
7	34

Start Graph, Color red

x	y
0	13
1	8
2	9
3	16
4	29

Start Graph, Color green

x	y
1	23
2	15.5
3	14.333
4	16.25
5	20.6
6	27.167

Label "Quantity of Jackets" at pixel coordinates (175,0).Label "Price of Jackets" at pixel coordinates (0,170).

Suppose that the equilibrium price is $19.28 (black line). What will happen in this market in the long run?

New firms will enter.
No new entry/no exit.
Existing firms will exit.

Hint

Question 3

The graph below shows cost curves for a typical firm operating in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 8, vertical axis: 0 to 29. Start Graph, Color black

x	y
0	20.33
1	20.33
2	20.33
3	20.33
4	20.33
5	20.33
6	20.33
7	20.33
8	20.33

Start Graph, Color blue

x	y
0	19
1	16
2	15
3	16
4	19
5	24
6	31
7	40

Start Graph, Color red

x	y
0	19
1	14
2	15
3	22
4	35

Start Graph, Color green

x	y
1	35
2	24.5
3	22.333
4	23.75
5	27.8
6	34.167
7	42.714

Label "Quantity of Textbooks" at pixel coordinates (175,0).Label "Price of Textbooks" at pixel coordinates (0,170).

Suppose that the equilibrium price is $20.33 (black line). What will happen in this market in the long run?

Existing firms will exit.
New firms will enter.
No new entry/no exit.

Hint

Question 4

The graph below shows cost curves for a typical firm operating in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 8, vertical axis: 0 to 30. Start Graph, Color black

x	y
0	23.66
1	23.66
2	23.66
3	23.66
4	23.66
5	23.66
6	23.66
7	23.66
8	23.66

Start Graph, Color blue

x	y
0	20
1	17
2	16
3	17
4	20
5	25
6	32
7	41

Start Graph, Color red

x	y
0	20
1	15
2	16
3	23
4	36

Start Graph, Color green

x	y
1	37
2	26
3	23.667
4	25
5	29
6	35.333
7	43.857

Label "Quantity of Bags" at pixel coordinates (175,0).Label "Price of Bags" at pixel coordinates (0,170).

Suppose that the equilibrium price is $23.659510323984 (black line). What will happen in this market in the long run?

Existing firms will exit.
New firms will enter.
No new entry/no exit.

Hint

Question 5

The graph below shows cost curves for a typical firm operating in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 8, vertical axis: 0 to 26. Start Graph, Color black

x	y
0	18
1	18
2	18
3	18
4	18
5	18
6	18
7	18
8	18

Start Graph, Color blue

x	y
0	16
1	13
2	12
3	13
4	16
5	21
6	28
7	37

Start Graph, Color red

x	y
0	16
1	11
2	12
3	19
4	32

Start Graph, Color green

x	y
1	29
2	20
3	18.333
4	20
5	24.2
6	30.667
7	39.286

Label "Quantity of Bags" at pixel coordinates (175,0).Label "Price of Bags" at pixel coordinates (0,170).

Suppose that the equilibrium price is $18 (black line). What will happen in this market in the long run?

No new entry/no exit.
Existing firms will exit.
New firms will enter.

Hint