1. A profit-maximizing firm you work for is currently producing 2000 units of output per month. The firm can sell all it wants of its product at the market price of $50 per unit. At its current level of production, the firm's marginal costs are $50 per unit and increase as output expands. Total fixed costs are $50,000 per month and monthly total variable costs are $80,000. Your advice to the firm is: A. Maintain the current rate of output in the short run but prepare to leave the industry in the long run. 3. Maintain the current rate of output in the short run and expect to remain in the industry in

1. A profit-maximizing firm you work for is currently producing 2000 units of output per month. The firm can sell all it wants of its product at the market price of $50 per unit. At its current level of production, the firm's marginal costs are $50 per unit and increase as output expands. Total fixed costs are $50,000 per month and monthly total variable costs are $80,000. Your advice to the firm is: A. Maintain the current rate of output in the short run but prepare to leave the industry in the long run. 3. Maintain the current rate of output in the short run and expect to remain in the industry in

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I DO NOT NEED THE TABLE INSTEAD I NEED THE ANSWERS TO THE QUESTIONS BELOW Quantity of Output Total Variable Cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 1 $20 2 $35 3 $45 4 $60 5 $80 6 $105 7 $140 8 $185 9 $250 10 $340 Imagine yourself running a pizza restaurant over a short term horizon. Think about the following potential changes in your costs. For each, try to discern which would affect your fixed costs from those that are variable costs. Specifically, how would each scenario shift your Average Variable Cost, Marginal Cost, and Average Total Cost curves? Explain your answers. The wages of hourly workers increase The cost of cheese increases The rent on the building housing your restaurant increases The price of gasoline (for pizza delivery) decreases
Problem-3: Consider total cost and total revenue given in the following table. Quantity Total Cost Total Revenue 0 $15 0 1 20 8 2 29 26 3 39 50 4 50 65 5 64 79 6 80 92 7 95 100 Calculate profit, marginal revenue, marginal cost for each quantity? How much should the firm produce to maximise profit?.
File 5 R24 Undo AKIT 12345678 234 1 14 15 1 67 1 1 1 9 1 10 1 1 11 1 12 1 13 1 1 16 1 1 1 Home Insert Draw Page Layout Formulas 1 1 Paste Clipboard N MOTN B L 0 1 2 3 4 5 6 7 8 9 10 11 12 13 17 18 19 20 21 22 Fixed Costs = 23 24 25 14 15 16 17 18 OPOLEEEEE X ✓ fx C D TP MPP 0 12 26 41 55 68 Arial 80 91 101 110 118 125 131 136 BIU 140 143 145 146 146 V ✓10 Font E FC V V F VLC A^ A Data Review View Automate Help IN G VMC Alignment H TVC TC 7 General $ V J AFC % 9 Number $5K interest and principle, insurance and property tax + $1 K Lawyer's retainer + $2K Government Regulation compliance manager + $1K HR/diversity compliance manager + $2.5K accountant + $3K principal's opportunity cost ←.0 .00 K AVTC →.0 5 Conditional Format as Formatting Table ✓ Styles ATC M MC Cell Styles N * Insert Delete Format Cells V P 图M Σ AT Sort & Find & Filter Select ✓ Editing R Comments Analyze Data Analysis = S Share T Column A: K = units of capital Column B: L = Column C: TP = Column D: MPP = Marginal…
Costs and Profit Maximization: Work It Out 1 Suppose Margie decides to lease a photocopier and open up a black-and-white photocopying service in her dorm room for use by faculty and students. Her total cost, as a function of the number of copies she produces per month, is given in the table. Number of Photocopies Per Month Total Cost Fixed Cost Variable Cost Total Revenue Profit 0 $100 1,000 $110 2,000 $125 3,000 $145 4,000 $175 5,000 $215 6,000 $285 a. Fill in the missing numbers in the table, assuming that Margie can charge 6 cents per black-and-white copy. Margie's fixed cost is: $ Variable cost, 0 photocopies/month: $ Variable cost, 1,000 photocopies/month: $ Variable cost, 2,000 photocopies/month: $ Variable cost, 3,000 photocopies/month: $ Variable cost, 4,000 photocopies/month: $…
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37 Total Total Average Average Output Fixed Variable Total Variable Total Marginal (Q) Cost Cost Cost Cost Cost Cost E of 150 $500 $400 $900 $2.67 200 $500 $800 $1,300 $6.50 The table above shows costs for a firm. When Q = 150, Average Total Cost (ATC) is equal to: Select one: а. $3.33 b. $900 c. $6.00 d. $2.67
4. A firm in a purely competitive industry is currently producing 1,500 units per day at a total cost of $500. If the firm produced 1,000 units per day, its total cost would be $310, and if it produced 500 units per day, its total cost would be $175. a. What are the firm's ATC at these three levels of production? i. At 1,500 units per day, ATC = $. ii. At 1,000 units per day, ATC = $. III. At 500 units per day, ATC = $. b. If all firms have the same cost structure, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?
Question 8 of 20 Total Total Average Average Average Fixed Variable Total Marginal Variable Fixed Cost $200 Output Total (Q) Cost Cost Cost Cost Cost Cost $0 $200 $200 $150 $350 40 $200 $250 $450 60 $200 $450 $650 80 $200 $800 $1,000 For the cost data shown above, what is this firm's Marginal Cost (MC) if it increases its Output (Q) from 20 to 40? $100 $10.00 $7.50 O $5.00 20