9) A competitive firm's production function is f(x1, x2) = 12x/2+ 4x. The price of factor 1 isS2 and the price of factor 2 is $2. The price of output is $6. What is the profit-maximizingquantity of output?%3D

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Answered: 9) A competitive firm's production…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Profit maximization using total cost and total revenue curves Suppose Caroline runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Caroline's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Caroline produces. Caroline's profit is maximized when she produces______ shirts. When she does this, the marginal cost of the last shirt she produces is ______, which is (GREATER OR LESS) than the price Caroline 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 _____, which is (GREATER OR LESS) than the price Caroline receives for each shirt she sells. Therefore, Caroline's profit-maximizing quantity corresponds to the…
Managers of perfectly competitive firms must be cautious when deciding to permanently expand (or contract) the scale of production. What factors should go into the decision to expand the scale of production if the market price of your product increases? (select all that apply) A. Whether your product has a complement in consumption B. If the scale expansion is appropriate and not in excess C. If other firms are likely to enter the market D. Whether the price change is temporary or permanent
1/32/3 1. Suppose a perfectly competitive firm's production function is f(x1,x2) = xx, the price of the product is 3, the cost of input x1 is 4, and the cost of input x2 is 1/2. In the short run, the input x2 is fixed at 8 unit. To maximize its profit, the firm will units of x1, and the maximized profit level is choose
A competitive firm's production function is f(L, M) = 8L¹/2 + 8M1/2. The price of L is $1 and the price of M is $3. The marginal product of L is 4/L1/2 and that of Mis 4/M¹/2. The price of output is $6. What is quantity of output? the profit-maximizing 512 516 244 256
Yuri has been offered a job with a weekly wage of $800. Yuri declines the offer and starts a tutoring business of his own. He rents a classroom for $200/week. Additional material costs are $5 per student per one-hour tutorial. Tuition is $30 per student per tutorial (regardless of the size of the tutorial class). 3a) What is the weekly accounting profit function for Yuri's business? 3b) What is the weekly economic profit function for his business? - --- ---- 3c) What is the economic breakeven number of tutorial hours per week?
Consider a firm whose total cost function is 2q3 – 6q2 + 13q.a. If the price of a unit of output is $13, what is the profit-maximizing value of q?b. Find the average cost function of the firm? What is the firm’s minimum average cost?c. What is the equilibrium price of output? How much does each firm produce at equilibriumprice? What is the firm’s short-run and long-run average cost at this quantity? What is eachfirm’s profit at the equilibrium price and quantity?
A price-taking firm's variable cost function is VC = 20³, where Q is its output per week. It has a sunk fixed cost of $108 per week. Its marginal cost is MC = 6Q². a. What is the firm's supply function when the $108 fixed cost is sunk? Instructions: Enter your answer as a whole number. Q = (P/6) 0.5 for Pz $| b. What is the firm's supply function when the fixed cost is avoidable? Instructions: Enter your answer as a whole number. Q = (P/6) 0.5 for Pz $ 216 ✪ 0
2. A competitive firm uses two variable factors to produce its output, with a production function q min{x₁, x₂}. The price of factor 1 is $8 and the price of factor 2 is $5. Due to a lack of warehouse space, the company cannot use more than 10 units of x₁. The firm must pay a fixed cost of $80 if it produces any positive amount but doesn't have to pay this cost if it produces no butput. What is the smallest integer price that would make a firm willing to produce a positive amount? b. d. $44 $41 $29 $13 $21
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Suppose a profit maximizing firm in a perfectly competitive market currently pays their employees $20 per hour. When their most recently hired employee began working at the firm, their hourly production increased by 5 units. What price must they sell their product for?
PS4.2 (a) What Optimal Level of Output (q*) will a Firm Produce given the following? MC(q) = 3 + 2q Price (P) = $9 MC → Marginal Cost q→ Quantity (b) What is a Firm's Producer Surplus assuming the following? Area of Triangle = 1/2* Base * Height (c) Will a Firm be Earning a Positive, Negative, or Zero Profit in the Short-Run given the following? AVC (q) =3+q FC = $3 AVC → Average Variable Cost FC Fixed Cost
1

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9) A competitive firm's production function is f(x1, x2) = 12x²+ 4x². The price of factor 1 is $2 and the price of factor 2 is $2. The price of output is $6. What is the profit-maximizing quantity of output?