Homework Help is Here – Start Your Trial Now!
Business
Economics
3. (40 points) Germaine purchases X=seeds (lbs) and plants them to produce flowers. The price of the input, seeds, is Px = $30/lb. The price of the output, flower, is Py = $4/flower. a. Germaine's fixed costs are as follows: Total Fixed Costs (TFC) = $10 Complete the cost chart below for Germaine's Cut-Flower Business. Round the answers to the hundredths place. Y=TPP) TVC () TC) AVC (_) ATC () MC) 0 0 5 30 40 15 60 35 90 45 120 50 52 150 182 b. Plot the Marginal Cost (MC), Marginal Revenue (MR), and Average Variable Cost (AVC) curves on the same graph. 16 MC ( MR( 6 14 12 10 8 4 2 0 0 10 20 30 40 50 60 Y=TPP (# of flowers) c. What is Germaine's profit maximizing level of output? Briefly, explain why. d. Suppose the price of Germaine's output increases to $10/flower. What will the profit maximizing level of output be? e. Suppose the price of Germaine's output decreases to $1.50 per flower. What will the profit maximizing level of output be? Briefly, explain why.

3. (40 points) Germaine purchases X=seeds (lbs) and plants them to produce flowers. The price of the input, seeds, is Px = $30/lb. The price of the output, flower, is Py = $4/flower. a. Germaine's fixed costs are as follows: Total Fixed Costs (TFC) = $10 Complete the cost chart below for Germaine's Cut-Flower Business. Round the answers to the hundredths place. Y=TPP) TVC () TC) AVC (_) ATC () MC) 0 0 5 30 40 15 60 35 90 45 120 50 52 150 182 b. Plot the Marginal Cost (MC), Marginal Revenue (MR), and Average Variable Cost (AVC) curves on the same graph. 16 MC ( MR( 6 14 12 10 8 4 2 0 0 10 20 30 40 50 60 Y=TPP (# of flowers) c. What is Germaine's profit maximizing level of output? Briefly, explain why. d. Suppose the price of Germaine's output increases to $10/flower. What will the profit maximizing level of output be? e. Suppose the price of Germaine's output decreases to $1.50 per flower. What will the profit maximizing level of output be? Briefly, explain why.

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 4.10P
See similar textbooks
icon
Related questions
Question
3. (40 points) Germaine purchases X=seeds (lbs) and plants them to produce flowers. The price of the input, seeds, is Px = $30/lb. The price of the output, flower, is Py = $4/flower. a. Germaine's fixed costs are as follows: Total Fixed Costs (TFC) = $10 Complete the cost chart below for Germaine's Cut-Flower Business. Round the answers to the hundredths place. Y=TPP) TVC () TC) AVC (_) ATC () MC) 0 0 5 30 40 15 60 35 90 45 120 50 52 150 182 b. Plot the Marginal Cost (MC), Marginal Revenue (MR), and Average Variable Cost (AVC) curves on the same graph. 16 MC ( MR( 6 14 12 10 8 4 2 0 0 10 20 30 40 50 60 Y=TPP (# of flowers) c. What is Germaine's profit maximizing level of output? Briefly, explain why. d. Suppose the price of Germaine's output increases to $10/flower. What will the profit maximizing level of output be? e. Suppose the price of Germaine's output decreases to $1.50 per flower. What will the profit maximizing level of output be? Briefly, explain why.
Transcribed Image Text:3. (40 points) Germaine purchases X=seeds (lbs) and plants them to produce flowers. The price of the input, seeds, is Px = $30/lb. The price of the output, flower, is Py = $4/flower. a. Germaine's fixed costs are as follows: Total Fixed Costs (TFC) = $10 Complete the cost chart below for Germaine's Cut-Flower Business. Round the answers to the hundredths place. Y=TPP) TVC () TC) AVC (_) ATC () MC) 0 0 5 30 40 15 60 35 90 45 120 50 52 150 182 b. Plot the Marginal Cost (MC), Marginal Revenue (MR), and Average Variable Cost (AVC) curves on the same graph. 16 MC ( MR( 6 14 12 10 8 4 2 0 0 10 20 30 40 50 60 Y=TPP (# of flowers) c. What is Germaine's profit maximizing level of output? Briefly, explain why. d. Suppose the price of Germaine's output increases to $10/flower. What will the profit maximizing level of output be? e. Suppose the price of Germaine's output decreases to $1.50 per flower. What will the profit maximizing level of output be? Briefly, explain why.
Expert Solution
steps

Step by step

Solved in 2 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
Economics
ISBN:
9781285635101
Author:
MCEACHERN
Publisher:
Cengage
Microeconomics: Principles & Policy
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS