11. Study Questions and Problems #11Suppose the industry equilibrium price of residential housing construction is $120 per square foot, and the minimum average variablecost for a residential construction contractor is $150 per square foot.You should advise the owner of the firm to 11. Study Questions and Problems #11Suppose the industry equilibrium pricecost for a residential construction contrYou should advise the owner of the firm todecrease outputshut downincrease outputing construction is $120 per square foot, and the minimum average variablequare foot.

The owner of the firm should shut down operations temporarily in the short run.Explanation:Given the…

Answered: 11. Study Questions and Problems #11…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Sketch the MC and ATC curves. Put quantity of output on the horizontal axis and measure costs on the vertical axis. Quantity (Q) Price Total Total Profit Marginal Revenue Marginal Cost (TC) Cost (MC) (P) Revenue (TR) (MR) 6. 25 126 7 25 141 8 25 160 25 183 10 25 210 11 25 245 12 25 300 3. Complete the table above. 4. What is the profit-maximizing level of output? 5. What is the amount of profit at the profit maximizing output level?
The table below shows cost and revenue information for Choco Lovers, a purely competitive firm producing different quantities of chocolate gift boxes. Fill in the blanks in the table. Instructions: Enter your answers rounded to two decimal places. Choco Lovers Cost and Revenue Quantity TC ATC MC of Gift Boxes ($) ($) ($) 10 65.00 6.50 4.00 15 82.50 5.50 20 5.13 4.00 25 127.50 5.00 30 162.50 5.42 7.00 35 207.50 5.93 9.00 Assume the profit-maximizing price is $5 per gift box, and then answer the following questions: a. Profit-maximizing quantity = gift boxes b. Total revenue = $ c. Profit = $ d. Profit per unit = $ per gift box
None
If a perfect competitor was earning an economic profit in the short run, would this situation continue through the long run? Why or why not? (Answer with diagram) Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
2. For the following total revenue and total cost functions of a firm: TR = 800Q – 10Q2 TC = (2/3)Q3 -30Q2 + 672Q +4000 (a) Determine the level of output at which the firm maximizes total profit (b) Calculate the profit (need step by step, please)
3. Firm Alpha is a price taker. Its marginal cost is MC(q), average cost is AC(q), and average variable cost is AVC(q). At the current short-run price P, firm Alpha optimally chooses to produce q=100, but it has a negative profit. Then we can conclude that AMC>P B AVC>P>AC CAC>AVC>P DP>AVC> AC E AC>P> AVC
Please answer F and show steps for the graph
3. The components of marginal revenue Asim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Asim initially produced seven trucks, but then decided to increase production to eight trucks. The following graph gives the demand curve faced by Asim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Asim must lower the price from $100,000 to $50,000 per truck. Notice that Asim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial seven engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. PRICE (Thousands of dollars per fire engine) 275 250 Asim 225 200 175…
1. A firm in a perfectly competitive industry has fixed costs of FC = 15, marginal costs of MC = 5 + 14g, and average variable costs of AVC = 5 + 7q. (a) What are the firm's variable costs (VC)? (b) What is the firm's total cost function? (c) If the price is $75, how much does the firm supply? (d) Does the firm continue to supply this quantity in the short-run? (e) Suppose there exists a standard market demand function from consumers (downward slopping). Please provide a logical discussion about how the market achieves short-run equilibrium.
5. Exercise 10.7 Royersford Knitting Mills, Ltd., sells a line of women's knit underwear. The firm now sells about 20,000 pairs a year at an average price of $40 each. Fixed costs amount to $240,000, and total variable costs equal $480,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents. The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand with respect to prices is estimated at -2. The proposal to cut prices by 5 percent would |$ and total profits would be $ total revenues from $800,000 to $ Total costs would be If average variable costs are assumed to remain constant over a 10 percent increase in output, total profits after a 5 percent price cut would be S
True or False
Consider a kettle firm A in a perfectly competitive market. Table 1 shows the quantity produced per hour (Q) and the total cost (TC) in the short run. Quantity 0 12345C70 2 6 8 Total cost 17 30 40 55 75 100 130 165 210 Fixed cost 17 17 17 17 17 17 17 17

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