A purely competitive firm finds that the market price for its product is $20. It has a fixed cost of $100 and a variable cost of $17.50 per unit for the first 50 units and then $27.50 per unit for all successive units. Instructions: Enter your answers rounded to two decimal places. a. Does price equal or exceed average variable cost for the first 50 units? (Click to select) What is the average variable cost for the first 50 units? per unit b. Does price equal or exceed average variable cost for the first 100 units? (Click to select) What is the average variable cost for the first 100 units? $ per unit c. What is the marginal cost per unit for the first 50 units? $ per unit The marginal cost for units 51 and higher? per unit d. For each of the first 50 units, does MR exceed MC? (Click to select)

A purely competitive firm finds that the market price for its product is $20. It has a fixed cost of $100 and a variable cost of $17.50 per unit for the first 50 units and then $27.50 per unit for all successive units. Instructions: Enter your answers rounded to two decimal places. a. Does price equal or exceed average variable cost for the first 50 units? (Click to select) What is the average variable cost for the first 50 units? per unit b. Does price equal or exceed average variable cost for the first 100 units? (Click to select) What is the average variable cost for the first 100 units? $ per unit c. What is the marginal cost per unit for the first 50 units? $ per unit The marginal cost for units 51 and higher? per unit d. For each of the first 50 units, does MR exceed MC? (Click to select)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?

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What two lines on a cost curve diagram intersect at the shutdown point?
Maria 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.)
Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price Per Hour (Q) (P) 0 $6.00 1 5.50 2 5.00 3 4.50 4 4.00 5 3.50 6 3.00 7 2.50 8 2.00 Total Cost (TC) $2.00 6.50 10.00 13.00 15.50 17.50 19.00 21.00 24.00 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 $ Maria's maximum profit is $ (Enter your response rounded to two decimal places.) (Enter your response rounded to two decimal places.) (Enter your b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is $ 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.)
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?
Q3_A The Break even Analysis of firm show that: BEP = 1000 FC = 10,000 $ P = 3% of the quantity of zero profit. A) The point of intersection of TR with TC is at the cost point of $ 45,000 for TR. B) At the point where (zero units sold) TC equals $ 5,000 C) the start of the line drawing for TR is at cost point $ 0 D) the value UVC for the product in question equals $ 10) E)the FC value in a point for BFP equals $ 10,000 For the given choices, showing which one is True and which one is False, correcting the False ones and given a reasonable reason for the True. Write your answer below:
1. Mariel runs an ice cream shop. Her short-run cost is given by 300 + is the number of ice cream cones she sells per day. + 3q where q 3000 (a) Find mathematical expressions for Mariel's marginal cost, average variable cost, and average total cost. (b) Sketch' Mariel's marginal cost, average variable cost, and average total cost. (c) Suppose the market price for ice cream cones is $3. How many ice cream cones will Mariel supply? What will her profits be? Identify your answers on the diagram and then compute the values mathematically. (d) Find the minimum market price such that Mariel will stay in business in the short-run, both on your diagram and mathematically. (e) Assume that Mariel can only run an ice cream shop of this size and in the long run must decide whether to operate or not. (In other words, assume that Mariel's LRAC curve is her short-run average total cost curve.) Identify the minimum market price such that Mariel will stay in business in the long-run on your diagram.…
Danilo and his wife operate a restaurant where they sell all their meals for $14.00 each. The markup on each meal is $5.00 and overhead expenses are 19.00% of cost. a. How much does it cost them to make each meal? $0.00 Round to the nearest cent b. What is their operating profit per meal? 50.00 Round to the nearest cent c. Calculate the break-even price. Round lo the nerert rent
5. Harry's Hardware realizes a markup of $34.50 if it sells an article at a markup of 40% of the selling price. a. What is the regular selling price? b. What is the cost? c. What is the rate of markup based on cost? d. If overhead expenses are 27% of cost, what is the break-even price? e. What is the operating profit or loss, if the article is sold for $75?
What is the total cost for this firm? (omit $ sign. Report cents as needed.) MC ATC D Quantity Price $14.00+ $12.00 $10.00 $8.00 0 1 1 I 250 300 MR
2. Find the volumes over which each site for making a product is the lowest cost. Site Fixed Variable 1 20,000 18 2 10,000 32,000 23 166 4. 35,000 20 a) What is the highest volume where site 2 is the lowest cost? b) What is the lowest volume where site 3 is the lowest cost?
1. A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright? 2. Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed cost is$800, of which $600 is avoidable if it shuts down? Explain.
Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Price Total Cost Hour (Q) (P) (TC) $6.00 $1.50 1 5.50 5.00 2 5.00 7.50 3 4.50 9.50 4 4.00 11.00 3.50 12.00 6 3.00 12.50 7 2.50 13.50 8 2.00 15.50 a. To maximize profits, Maria should sell loaves of ciabatta bread per hour. (Enter your response as an integer.)