4. Profit maximization in the cost-curve diagramSuppose that the market for candles is a competitive market.The following graph shows the daily cost curves of a firmoperating in this market. (Note: Area in blue rectangle isshown in thousands.)3228V24ATCAVCMCPRICE (Dollars per candle)40368400+248610QUANTITY (Thousands of candles)12 14 16 18. 206,000In the short run, at a market price of $20 per candle, this firmwill choose to producecandles per day.8,000Profit or Loss (in thousands)?On the previous graph,9,000the blue rectangle (circle symbols)to shade the area (in the 12000 ands) representing the firm's profitor loss if the market price is $20 and the firm chooses toproduce the quantity you already selected.Note: In the following question, you should enter a positivenumber in the numeric entry field.[$The area (in thousands) of this rectangle indicates that thefirm'swould beper day.

A perfectly competitive firm comprises many buyers and sellers wherein each seller sells identical…

4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (Note: Area in blue rectangle is shown in thousands.) 28 V 24 ATC AVC MC PRICE (Dollars per candle) 40 36 32 8 4 0 0 + 2 4 6 10 12 14 16. QUANTITY (Thousands of candles) 8 18 20 6,000 Profit or Loss (in thousands) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. 8,000 ? On the previous graph, 9,000 the blue rectangle (circle symbols) to shade the area (in th 12000 ands) representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area (in thousands) of this rectangle indicates that the firm's would be per day.

4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (Note: Area in blue rectangle is shown in thousands.) 28 V 24 ATC AVC MC PRICE (Dollars per candle) 40 36 32 8 4 0 0 + 2 4 6 10 12 14 16. QUANTITY (Thousands of candles) 8 18 20 6,000 Profit or Loss (in thousands) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. 8,000 ? On the previous graph, 9,000 the blue rectangle (circle symbols) to shade the area (in th 12000 ands) representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area (in thousands) of this rectangle indicates that the firm's would be per day.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The next 6 questions relate to the following table. Calculate total revenue at a quantity of 5 units. (The table gives you Quantity, Price, and Total Costs, leaving the Total Revenue and Profit for you to calculate.) Quantity Price Total Revenue Total Cost Profit 0 70 0 1 70 60 2 70 120 3 70 180 4 70 300 5 70 410 Calculate profit at an output of 4 units. What is the highest profit possible? What is the profit maximizing level of output What is the profit maximizing price? Can you tell if this is the short run or long run? Explain.
The graph shows the short-run cost curves of a toy producer. The market has 1,000 identical toy producers. The market price of a toy is $21. In the short run, the firm produces toys a week. 24- 21- 18- 15- 12- 9- 0 500 1000 1500 2000 MC ATC AVC 2500
The 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. PRICE (Dollars per overalls) 50 45 40 35 15 10 5 0 0 2 MC ATC AVC 10 12 4 8 14 16 QUANTITY (Thousands of overallses per day) 18 20 In the short run, given a market price equal to $15 per overalls, the firm should produce a daily quantity of The rectangular area represents a short-run Profit or Loss 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. of $ overallses. thousand per day for the firm.
Farmer Lee grows strawberries. The average total cost and marginal cost of growing strawberries in the long run for an individual farmer are illustrated in the graph to the right. Suppose the market price is $7.05 per box. If so, then farmers will strawberries until the market price is $ number rounded to two decimal places.) per box. (Enter a numeric the market for a real enter exit Price and cost (dollars per box) 10- 9- 8- 5- 3- 2- 1. 0 MC ATC 10 20 30 40 50 60 70 80 90 100 Quantity of strawberries (boxes per week) o
Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 Profit or Loss 40 35 30 АТС 25 20 15 10 AVC MC 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Shirts) PRICE AND COST (Dollars per shirt)
O Macmillan Learning The graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Then, consider what would happen to the market if a third supplier enters the market, holding all else constant. Price per Stuffed Animal($) 10 9 8 50 2 1 Market for Stuffed Animals Firm 1 Firm 2 Market 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Quantity of Stuffed Animals A third firm would mean market supply increases.
Quantity of Miami Dade Shades 1st pair 2nd pair 3rd pair 4th pair Marginal Cost (dollars) producer surplus will equal $105. there will be a surplus; as a result, the price will fall to $95. $60 95 140 185 Refer to Table 4-4. The table above lists the marginal cost of sunglasses by Miami Dade Shades, a firm that specializes in producing designer sunglasses. If the market price for a pair of Miami Dade Shades sunglasses is $130, A they will produce three pairs. B producer surplus from the first pair is $35.
2. Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a particular firm operating in this PRICE (Dollars per wind chime) 40 b) 36 32 28 24 20 16 2 8 4 0 MC 0 2 4 + 10 12 14 16 18 20 QUANTITY (Thousands of wind chimes per day) 8 market: a) In short run, at a market price of $26 per wind chime how much will firm ATC AVC 6 the market price is $26 in th quantity you obtained in question (a), indicate the area that represents firm's profit or loss in short run on the graph. c) What is this firm's shutdown price, that is the price below which it is optimal for the firm to shut down in short run? d) In the long run, all firms can enter and exit the market, and all entrants have the same costs as above. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? Explain your answers. e) Graph the…
Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. PRICE (Dollars per candle) 8 2 2 3 2 8 36 32 28 24 20 4 0 0 MC 2 ATC AVC 6 4 8 10 12 14 16 QUANTITY (Thousands of candles per day) 18 20 Profit or Loss In the short run, at a market price of $20 per candle, this firm will choose to produce On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. OL candles per day. a n W
The following graph plots daily cost curves for a firm operating in the competitive market for fitness trackers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE(Dollars pertracker) 100 90 70 60 50 40 20 10 0 0 MO ATC AVC 50 60 70 80 10 20 30 40 QUANTITY (Thousands of trackers per day) 90 100 Profit or Loss In the short run, given a market price equal to $45 per tracker, the firm should produce a daily quantity of trackers. 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 $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)
V See Hint Suppose that Juan sells burritos. The total cost of production, based on the number of burritos produced, is shown in the following table. Number of burritos Total cost ($) 1. 8) 2. 10 3) 13 4. 18 25 34 7. 45 Suppose that the price is $6. Assuming profit maximization, how many burritos will Juan sell? asopdne