5. Profit maximization and shutting down in the short run Suppose that the market for blenders is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. PRICE (Dollars per blender) 100 90 80 70 60 50 40 30 20 10 0 0 5 MC ATC AVC + 40 10 15 20 25 30 35 QUANTITY (Thousands of blenders) 45 50 (?)
Q: What are risk preferences of this investor, are they risk-averse, risk- neutral or risk-loving?…
A: To determine the investor's risk preferences, we need to look at the second derivative of the…
Q: Using both a long-run aggregate supply curve and a short-run aggregate supply curve can help…
A: Keynesian economics is a framework for economics that promotes government involvement in an economy…
Q: A small town has a duopoly in its tattoo market. Two firms, "Thread the Needle" and "Ink about it"…
A: A market structure where there are only two dominant firms or companies that are competing against…
Q: A small town has a duopoly in its tattoo market. Two firms, "Thread the Needle" and "Ink about it"…
A: Nash equilibrium is a set of strategies chosen by players when players have no incentive to deviate.
Q: The part of the Federal Reserve that determines and implements the nation's monetary policy and…
A: FOMC: It refers to the part of the federal reserve. The primary work is to make policy in FED. The…
Q: How has Ethereum (cryptocurrency) evolved over time, and how may it evolve further in the future?…
A: Ethereum is a decentralized blockchain stage that was sent off in 2015 by Vitalik Buterin. It is the…
Q: in Sanaton. What is the income share of the richest quintile (fifth quintile)? Just enter the…
A: A quintile is a phrase that designates the division of a sample or population into five equal…
Q: Show in a graph and compare the long-term equilibria of a company operating in a monopolistically…
A: The long term equilibrium of a company under perfect competition as well as monopolistic competition…
Q: Graph the Federal Funds market before and after the Federal Reserve's response to the crisis. Note…
A: Given that, Fund Rate = 1% Discount rate = 2% Interest on reserves = 0.5%
Q: # Model: SI model of a closed economy # Model input Y-18000 # Output Cc-300 # Autonomous consumption…
A: Y=18000 C=300+0.8(Y-T) G=3000 I=3500-400r T=2500
Q: Assume an aggregate production function with a constant marginal product of capital and with capital…
A: The growth rate of output alludes to the rate change in the degree of output over a predetermined…
Q: 2006, its government had no debt. Moreover, ndependence, Lower Slobodia chose to adopt the euro (€).…
A: Budget deficit: It refers to the situation when government expenditure is more than the government…
Q: Describe 2 (two) measures of trade restrictions (make sure to include tariffs) and discuss their…
A: Two common measures of trade restrictions are tariffs and import quotas. Both measures are designed…
Q: A _______ occurs when decision-makers face incentives that make it difficult to achieve mutually…
A: In economics, decision-making involves evaluating the costs and benefits of various alternatives and…
Q: According to the first paragraph of the statement, what factors did the committee consider in making…
A: The Federal Reserve serves as Country U's central bank. The Fed is a key player in the economy of…
Q: The remarkable thing about the events described in the article is that the yield on the 3-month…
A: In the bonds market, the equilibrium price of bonds and the equilibrium quantity of bonds traded in…
Q: Suppose there is some hypothetical economy in which households spend $0.50 of each additional dollar…
A: Given Marginal propensity to consume = 0.50 Marginal propensity to save = 0.50 Increase in…
Q: W h a t r o l e d o f i n a n c i a l m a r k e t s p l a y i n o u r e c o n o m y…
A: As per the authoring guidelines, in case of multiple questions asked which are not interrelated,…
Q: Guardian is a national manufacturing company of home health care appliances. It is faced with a…
A: Given data: To make: 2 machines are required: machine A: Initial cost=$18000 Salvage value=$2000…
Q: Point out the basic characteristics that define monopolistic competition and indicate the…
A: A competitive market is a market structure where there are many buyers and sellers, and no…
Q: Consider the following portfolio choice problem. The investor has initial wealth w and utility u(x)…
A: Risk aversion is a term used to describe an individual's preference for avoiding risk or uncertainty…
Q: Choose all that apply A.)If Company A opens a retail store, Company B is better off opening a retail…
A: The nash equilibrium is the outcome from which none of the player wants to deviate from the strategy…
Q: Question 5 A manufacturing company produces the quantity q of a product that depends on L units of…
A:
Q: Which are contractionary fiscal policies? Multiple Choice O O O O increased taxation and increased…
A: Fiscal policy is the policy used to change the aggregate demand. The fiscal policy includes the…
Q: Consider the following portfolio choice problem. The investor has initial wealth w and utility u(x)…
A: Utility function, u(x) = x^n/n Initial wealth = w There is a safe asset (such as a US government…
Q: The productivity of a country is given by f(x,y) = 100x0.650.35, where x is the amount of labor and…
A: Marginal productivity is defined as the change in the total productivity due to change in the amount…
Q: Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home…
A: Consumer surplus is the distinction between the price that consumers are inclined to pay for a…
Q: Consider the following entry game between an incumbent (I, blue payoff) and an entrant (E, green…
A: Nash equilibrium is the point of a game corresponding to which each participant optimizes his…
Q: Explain collusion as practiced most by oligopoly firms. Include in your answer and discussion of…
A: Collusion is a prevalent business practice in oligopolistic markets. A market with oligopoly refers…
Q: A city is planning to renovate their current facility with hi-tech computerized systems. Four plans…
A: The B/C ratio analysis is a tool used to assess the feasibility of a project by calculating the…
Q: Question 3 (a) Assume that a government cuts its expenditure and therefore runs a public-sector…
A: Public expenditure refers to that component of aggregate demand which is influenced by the…
Q: Using the “dynamic aggregate demand” and “dynamic aggregate supply” (DAD/DAS) model: (b) draw a…
A: To assess the dynamic changes in output and inflation after various macroeconomic events, a dynamic…
Q: 50. Add a curve to the graph below that shows how an Exclusive Union will impact a Perfectly…
A: Since you have asked for “no- 3”, and there happens to be no such number in the questions in the…
Q: The market structure of the local pizza industry is best characterised by monopolistic competition.…
A: The market demand for Pizza Shack is: Q = 225 - 10P Total revenue is the total receipt from the…
Q: How can we compare the experience of South Africa's and other other emerging economies inflation and…
A: Monetary policy refers to the actions taken by a central bank, such as the Federal Reserve in the…
Q: Consider a market with an incumbent firm and a new entrant E producing a homogenous product and…
A: This question concerns a market with an incumbent firm and a new entrant competing in quantities to…
Q: hat when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity falls…
A: The elasticity of Demand= In simple words we can define elasticity of demand as how much demand of a…
Q: How many recessions did the US economy experience between 1929 and 2020? What were the four longest…
A: A phase of the business cycle in which a significant and widespread decline in economic activity is…
Q: An amusement park has identified its demand functions as follows: Q = 50-3P The marginal operating…
A: Total revenue is the total value of the commodities produced and sold in equilibrium. Economic costs…
Q: Consider the following portfolio choice problem. The investor has initial wealth w and utility u(x)…
A: In economics, a portfolio problem is a problem in time finance, where an investor has to choose the…
Q: 2. iii) Labor demand is a result of and marginal utility, marginal cost O the marginal physical…
A: The demand for labor refers to an economics principle that derives its demand for an output of firm.…
Q: Explain how inflation was finally tamed in the early 1980's. Comment on which policy was used and…
A: NOTE: The question has been answered in a generalized manner. The situation of an increase in the…
Q: b. What is the opportunity cost of 1 ton of apples for the nations of Argentina and Brazil,…
A: Opportunity Cost: It refers to the foregone revenue on the next best alternative if we pick a…
Q: Describe with the help of graphs the long-term equilibrium of a monopolistically competitive market.…
A: A market structure known as monopolistic competition occurs when there are several vendors selling…
Q: Suppose that the price p (in dolars) and the weekly sales x (in thousands of units) of a certain…
A: The speed at which the quantity of goods or services sold is changing over time is termed the 'rate…
Q: Question 26 In which market structure is non-price competition is most prevalent in: Households,…
A: When the players in a market compete with each other on other factors and not price, such a market…
Q: Which of the following statements are true about this natural monopoly? Check all that apply. It is…
A: A market with a monopoly is one in which there are no direct competitors to the one firm controlling…
Q: A simple closed economy with government sector is given by the following equations: C = 10 + 0.75 Y…
A: Given information: C = 10 + 0.75Y ------------> Consumption function I = 20…
Q: Consider the following portfolio choice problem. The investor has initial wealth w and utility u(x)…
A: A key factor to understand investors and venture capitalist's decision making behavior is to study…
Q: Consider the production of handmade rugs and assembly robots in India and Canada. Assume that Canada…
A: Free trade is a strategy that advances international trade with no barriers like tariffs, quotas, or…
Aa5
Subject - economics
Step by step
Solved in 3 steps with 1 images
- TOTAL COST AND REVENUE (Dollars) 100 Total Cost ם Total Revenue 75 50 -25 A 50 0 1 2 5 QUANTITY (Shirts) A A Profit Calculate Neha's marginal revenue and marginal cost for the first seven shirts she produces and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. (?) COSTS AND REVENUE (Dollars per shirt) 30 25 225 20 15 10 о OO 2 3 A 5 6 QUANTITY (Shirts) Marginal Revenue + Marginal Cost Neha's profit is maximized when she produces 10 shirts. When she does this, the marginal cost of the previous shirt she produces is $ which is than the price Neha receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is S than the price Neha receives for each shirt she sells. Therefore, Neha's profit- maximizing quantity corresponds to the intersection of the which is curves. Because Neha is a price taker, this…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 2500JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
- 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? asopdne11. Explain the condition of equilibrium of a firm based on marginal cost and marginalrevenue. Need details explanation and make sure that no plagiarised answerPrinciples of Microeconomics Name: Homework #3 Prof. R. Harris DUE: Wednesday, April 17, 2019 at the beginning of class - NO EXCEPTIONS. Please remember to show all work and please be neat. Please staple this if you print it on your own. 1. Consider the following table of numbers, which represents demand and cost conditions for a com firm. petitive TR 600 0 1 2 $o $400 600 $400 $240 600 $430 $670 $960 $1,350 $1,840 $2,440 $3,120 $3,910 $4,800 600 600 600 600 600 600 5 6 7 600 600 9 10 (a) Fill in the missing values (b) Use the information in the chart to determine what level of output the firm should produce. Explain your reasoning.
- The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. (?) PRICE (Dollars per romper) 50 45 40 3.5 30 20 15 10 10 5 0 + 0 2 MC ATC AVC 4 6 8 12 14 16 QUANTITY (Thousands of rompers per day) 10 18 H 20 Profit or LossMaria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price (P) Per Hour (Q) 0 123 456 7 8 $6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 Total Cost (TC) $2.00 6.00 9.00 11.50 13.50 15.00 16.00 17.50 20.00 loaves of ciabatta bread per hour. (Enter your response as an integer.) a. To maximize profits, Maria should sell Maria should charge a price of $ (Enter your response rounded to two decimal places.) Maria's maximum profit is $ (Enter your response rounded to two decimal places.) b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is $ (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is $. (Enter your response rounded to two decimal places.)explain what is happening in this graphs
- 14. Profit maximization and shutting down in the short run The following graph plots daily cost curves for a firm operating in the competitive market for fitness trackers. PRICE (Dollars per tracker) 8888888 20 10 ATC MC AVC 10 20 30 40 50 GO 70 00 90 100 QUANTITY (Thousands of tracker) Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price (Dollars per tracker) Quantity (Trackers) Total Revenue (Dollars) Fixed Cost (Dollars) Variable Cost (Dollars) Profit (Dollars) 25.00 520,000 40.00 65.00 520,000 520,000 If the firm shuts down, it must incur its fixed costs (FC) in…Figure 16-12 100 Price 90 80 MC ATC 70 58 60 50 40 36 30 + 20 10 + MR 4 8 12 16 20,24 28 32 Buaxtity c) Does the firm minimize cost? Why or why not? How much excess capacity does this firm have?Price and cost (dollars per student) $150 120 88 76 72 ATC 40 - MC MR 24,000 30,000 36,000 Quantity of students enroiled 15,000 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "I think the course should be priced so that the maximum number of students enroll." Which price should this faculty member favor? O A. $0 В. $40 C. $88 D. $150