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8. Suppose that the firm in problem 7 can purchase a new productive technology that costs an additional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost of production in half at everyy production level. Assume that the new technology is purchased -- fill in the blanks for this changed chart below. 0 1 23 3 4 5 6 7 8 9 P 220 210 200 190 180 170 160 150 140 130 120 110 100 MR 210 190 170 150 130 110 90 70 50 30 10 -10 AFC AVC ATC MC 10 11 12 For the table you've just completed what are the firm's production, pricing and profit levels?

8. Suppose that the firm in problem 7 can purchase a new productive technology that costs an additional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost of production in half at everyy production level. Assume that the new technology is purchased -- fill in the blanks for this changed chart below. 0 1 23 3 4 5 6 7 8 9 P 220 210 200 190 180 170 160 150 140 130 120 110 100 MR 210 190 170 150 130 110 90 70 50 30 10 -10 AFC AVC ATC MC 10 11 12 For the table you've just completed what are the firm's production, pricing and profit levels?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please provide answer with explanation to question 8

7. Use the data in the table below Q P MR 0 220 1 210 2 200 3 190 4 180 170 160 150 140 130 120 110 100 420 150 210 135 140 123.3 105 112.5 84 103 70 95.8 60 92.1 52.5 91.3 50 46.7 93.3 30 42 99 10 38.2 105 -10 35 111.3 As you can see, fixed costs for this operation are 420. 5 6 7 8 9 10 11 12 8. 210 190 170 150 130 110 90 70 Q 0 1 2 3 4 5 6 7 8 9 10 11 12 P 220 210 200 190 180 170 160 150 140 130 120 110 100 AFC Assuming that this firm is a short run profit maximizer, what statement best describes its present situation? a) it should shut down immediately b) it is incurring a loss but should continue operating in the short run c) it is earning only a normal profit d) it is earning above normal profits e) insufficient data to answer this question MR Suppose that the firm in problem 7 can purchase a new productive technology that costs an additional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost of production in half at everyy production level. Assume that the new technology is purchased -- fill in the blanks for this changed chart below. 210 190 170 150 130 110 AVC 90 70 50 30 10 -10 AFC ATC 570 345 263.3 217.5 187 165.8 152.1 143.8 140 141 143.2 146.3 AVC MC 150 120 100 80 65 60 70 85 110 150 165 180 ATC MC For the table you've just completed what are the firm's production, pricing and profit levels?
Transcribed Image Text:7. Use the data in the table below Q P MR 0 220 1 210 2 200 3 190 4 180 170 160 150 140 130 120 110 100 420 150 210 135 140 123.3 105 112.5 84 103 70 95.8 60 92.1 52.5 91.3 50 46.7 93.3 30 42 99 10 38.2 105 -10 35 111.3 As you can see, fixed costs for this operation are 420. 5 6 7 8 9 10 11 12 8. 210 190 170 150 130 110 90 70 Q 0 1 2 3 4 5 6 7 8 9 10 11 12 P 220 210 200 190 180 170 160 150 140 130 120 110 100 AFC Assuming that this firm is a short run profit maximizer, what statement best describes its present situation? a) it should shut down immediately b) it is incurring a loss but should continue operating in the short run c) it is earning only a normal profit d) it is earning above normal profits e) insufficient data to answer this question MR Suppose that the firm in problem 7 can purchase a new productive technology that costs an additional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost of production in half at everyy production level. Assume that the new technology is purchased -- fill in the blanks for this changed chart below. 210 190 170 150 130 110 AVC 90 70 50 30 10 -10 AFC ATC 570 345 263.3 217.5 187 165.8 152.1 143.8 140 141 143.2 146.3 AVC MC 150 120 100 80 65 60 70 85 110 150 165 180 ATC MC For the table you've just completed what are the firm's production, pricing and profit levels?
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