4. Profit maximization in the cost-curve diagramThe following graph plots daily cost curves for a firm operating in the competitive market for demin overalls.Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates.504545OO40353530PRICE (Dollars per overalls)2015105+002ATCAVCMC46810 121416182020QUANTITY (Thousands of overallses per day)Profit or Loss? PRICE (Dollars per overalls)828°O10$MC2ATCAVC10 12 14 10 18 20QUANTITY (Thousands of overallses per day)Profit or LossIn the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity ofoverallses.On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of$15 and the quantity of production from your previous answer.Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss.The rectangular area represents a short-runof Sthousand per day for the firm.

A competitive market consists of a number of buyers and sellers where none of the buyers and sellers…

2 8 PRICE (Dollars per overalls) X 54 22 10 w O O O 6 O MC AVC 6 2 4 8 10 12 14 10 18 QUANTITY (Thousands of overallises per day) 20 Profit or Loss In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of overallses. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of S thousand per day for the firm.

2 8 PRICE (Dollars per overalls) X 54 22 10 w O O O 6 O MC AVC 6 2 4 8 10 12 14 10 18 QUANTITY (Thousands of overallises per day) 20 Profit or Loss In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of overallses. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of S thousand per day for the firm.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A chair manufacturer hires its assembly-line labor for $20 an hour and calculates that the rental cost of its machinery is $10 per hour. Suppose that a chair can be produced using 4 hours of labor or machinery in any combination. If the firm is currently using 2 hours of labor for every two hours of machine time, is it minimizing its cost of production? If so, why? If not, how can it improve the situation? The firm O A. is not currently minimizing its cost of production because the ratio of the marginal product of labor to the marginal product capital is equal to the ratio of the wage rate to the rental cost. O B. is currently minimizing its cost of production because its marginal rate of technical substitution less than the ratio of input prices. C. is not currently minimizing its cost of production because the marginal product of labor divided by the wage is less than the marginal product of capital divided by the rental cost. O D. is currently minimizing its cost of production…
QUESTION 18 Table Average Average Average Total Total Fixed Variable Marginal Quantity Fixed Variable Cost Cost Cost Cost Cost Cost Cost $50 S50 SO -- -- -- 1 $150 A C D E F G H I S120 J K 3 M P $120 R Refer to Table. Based on the information given in the above table, the value of F will be O a. $200 O b.$50 O c. $150 O d. $100
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Which of the following most directly decreases profits if nothing else changes? O Changing your wardrobe O Giving your workforce a raise O Reducing costs O Lowering price
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The accompanying table describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour Calls Per Hour 1 2 6 16 O 22 24 What is the total cost of making 2 calls an hour? Multiple Choice O $45 $40 $20 Number of Telephones 1 1 1 1 1 1 $10 Number of Workers Per Hour 2 4 6 8 10 12
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