A profit-maximizing firm in a competitive industry has the cost structure shown in the table below. Average Average Marginal Total Cost Fixed Cost Quantity Cost 25.00 20.00 4.20 2 14.40 10.00 3.60 3 10.87 6.67 4.20 4 9.40 5.00 6.00 9.00 4.00 9.00 9.33 3.33 13.20 7. 10.26 2.86 18.60 8. 11.70 2.50 25.20 9. 13.62 2.22 33.00 10 16.00 2.00 42.00 Calculate this firm's shut-down price, and explain your answer. What is this firm's supply curve? In answering this question, indicate the minimum price necessary for the firm to produce a positive quantity and the quantity it would produce that minimum price? (Hint: Draw on your answer to part a.) If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.

A profit-maximizing firm in a competitive industry has the cost structure shown in the table below. Average Average Marginal Total Cost Fixed Cost Quantity Cost 25.00 20.00 4.20 2 14.40 10.00 3.60 3 10.87 6.67 4.20 4 9.40 5.00 6.00 9.00 4.00 9.00 9.33 3.33 13.20 7. 10.26 2.86 18.60 8. 11.70 2.50 25.20 9. 13.62 2.22 33.00 10 16.00 2.00 42.00 Calculate this firm's shut-down price, and explain your answer. What is this firm's supply curve? In answering this question, indicate the minimum price necessary for the firm to produce a positive quantity and the quantity it would produce that minimum price? (Hint: Draw on your answer to part a.) If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $5, in the short - run a profit - maximizing firm would: Produce and earn a negative economic profit Not produce (as it leads to a negative profit) Produce and earn a normal profit Produce and earn a positive economic profit The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $5, in the short-run a profit-maximizing firm would: Price and cost 16 15 14 13 12 11 10 9 8 6 3 MO O Produce and earn a negative economic profit O Not produce (as it leads to a negative profit) O Produce and earn a normal profit O Produce and earn a positive economic profit ATC AVC 6 bis & Quantity
PQ 14.05 Reagan is a farmer and sells her wheat in a perfectly competitive market. Reagan produces 30,000 bushels of wheat for an average total cost of $7.50, marginal cost of $7.30, and average variable cost of $7.10. In the short-run, Reagan should produce more wheat if the current price is above, and should shut down if the current price is below Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $7.50; $7.30 $7.50; $7.10 $7.10; $7.30 $7.10; $7.00 e $7.30; $7.10 f $7.30; $7.00
Price 21 20 19 18 17 16 15 14 13 12 11 10 9 7 6 5 43210 3- ABCD Marginal cost A Average total cost Average variable cost 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 Quantity Which point or points are included in the firm's supply curve in the short run? None of these points are on the firm's short-run supply curve. B с D
Draw and describe a diagram representing the cost curves – MC, AC, and AVC – for a profit-maximizing firm under perfect competition. Show U-shaped AC and AVC curves. Label the breakeven and shut down prices. Also, show a price between the breakeven and shut down prices and explain how the firm decides on its profit-maximizing/loss-minimizing output level at that price and show how the amount of profit or loss can be shown in the diagram. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs (TFC) Costs (TVC) $40.00 $0.00 $40.00 $40.00 4 $40.00 $90.00 9. $40.00 $130.00 8. $40.00 $190.00 10 $40.00 $260.00 Refer to Table Cost.EX2. For 8 units, the average total cost is about O $23.75 O $26.75 O $30.00 $28.75
Question 5.5 T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2 each. At this level of output, the average total cost is $2.50 and the average variable cost is $2.20. Based on these data, the firm should shut down in the short run. decrease output to 2,500 units. ontinue to produce 3,000 units. increase output to 3,500 units.
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Problems: Question #6: The Phantom Farms bakery produces pumpkin pies according to the following short run cost schedules. Assume the pumpkin pie industry is perfectly competitive and that the bakery can only produce and sell whole pies. AVC = ATC = MC = Quantity (pies) TFC = total TVC = total TC = total fixed cost variable cost average average total marginal cost variable cost cost cost (i) same as (i) 1 14 18 14.0 18 14 2 same as (i) (ii) 28 12.0 14 10 3 same as (i) 38 42 12.7 (v) 14 4 same as (i) 60 (iii) 15.0 16 22 same as (i) 86 90 17.2 18 (vi) same as (i) 116 120 (iv) 20 30 Fill in the five missing cost numbers indicated in the table above. (i) (ii) (iii) (iv) (v) (vi) If the price of pumpkin pies is $22 per pie, how many pies should Phantom Farms produce in the short run? What profit or loss does the firm earn? Explain how you arrived at this answer. Illustrate Phantom Farms' choice with a graph and indicate profits or losses. 3
Question 11 11.1. Revenue is the same as profit. Do you agree with this statement? Justify your answer. 11.2. Using your knowledge of cost formulas and calculations for a firm producing in the short-run, redraw the table below in your answer book and complete the table by filling in the blank spaces. [Tip: Answers should be rounded off by two decimals]. (5) Total Average Variable Cost Average Total Cost (ATC) Total Total Cost Average Fixed Fixed Cost Marginal Cost (MC) Variable Quantity Cost Cost (TFC) (TVC) (TC) (AFC) (AVC) 80 80 1 80 12 80 12 2 80 28 40 14 54 3 34 114 26.67 38 6. 4 80 39 119 20 9.75 29.75 80 42 122 16 8.4 24.4 80 128 13.33 8 21.33 7 80 56 136 11.43 8 8 80 61 141 10 7.63 17.63 9 80 68 148 7.56 16.44 10 80 157 8 7.7 15.7 9. 11.3. Suppose a firm producing coffee provides you with the following information: Price = R100 Quantity = 150 units of coffee Cost of production = R9500 11.3.1. Calculate the total revenue of the firm. 11.3.2. Is the firm currently making a profit…
Table Cost.EX2.2: Data for a Competitive Firm Marginal Marginal Output Cost Revenue (Q) (MC) (MR) 10 $3.00 $4.00 11 $3.50 $4.00 12 $4.00 $4.00 13 $4.50 $4.00 14 $5.00 $4.00 15 $5.50 $4.00 16 $6.00 $4.00 Refer to Table Cost.EX2.2. If the firm wishes to maximize profit, it should produce units. O 10 O 12 O 11 6.