a. The following presents the costs and revenues for a firm. Marginal Revenue Quantity Total Cost Marginal Cost Profit Total Revenue 15 1 30 100 48 190 3 59 300 4 68 450 74 500 79 505 7 81 308 Calculate the marginal cost, marginal revenue and profit for each unit of production. How many units should the firm produce to maximise profit? i. ii. b. Describe the relationship between the marginal product and the total product of a firm

a. The following presents the costs and revenues for a firm. Marginal Revenue Quantity Total Cost Marginal Cost Profit Total Revenue 15 1 30 100 48 190 3 59 300 4 68 450 74 500 79 505 7 81 308 Calculate the marginal cost, marginal revenue and profit for each unit of production. How many units should the firm produce to maximise profit? i. ii. b. Describe the relationship between the marginal product and the total product of a firm

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is considered when calculating economic profit but not accounting profit? a. implicit cost b. explicit cost c. total revenue d. marginal cost e. All of the above are considered when calculating accounting profit.
Question 4 For a firm, the production function represents the relationship between OOO implicit costs and explicit costs. quantity of inputs and total cost. quantity of inputs and quantity of output. quantity of output and total cost. iz Instructions Question 5 Grace is a self-employed artist. She can make 20 pieces of pottery per week. She is considering hiring her sister Kate to work for her. Both she and Kate can make 35 pieces of pottery per week. What is Kate's marginal product? O 15 pieces of pottery O22.5 pieces of pottery O 35 pieces of pottery O 55 pieces of pottery
2. Understanding the role of fixed cost in the short run Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers (Dollars per flight) 30,000 10 45,000 20 50,000 30 53,000 40 55,000 50 57,000 58 000 60 00D'Rs 70 58,500 80 59,000 90 59,300 100 59,500 Given the information presented in the previous table, the fixed cost to operate this flight is S At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price Quantity Demanded (Dollars per ticket) (Tickets per flight) 900 700 50 300 70 100 100 Complete the following table by computing total revenue, total cost, variable cost,…
Labor (mechanics) 0 1 2 3 4 Output (bikes) 0 20 50 60 64 Total fixed costs (dollars) 220 Alberto's marginal cost of producing the 20th bike is $ [Round your answer to two decimals.] Total variable cost (dollars) 120 Total cost (dollars) The table above gives costs at Alberto's Bike Shop. While Alberto is a bike enthusiast, unfortunately, Alberto's record keeping has been spotty. Each mechanic is paid $120 a day and labor costs are the only variable costs of production. What is the marginal cost of producing the 20th bike?
Use the information in the graph to find the values for the fol- lowing costs at an output level of 500. a. Total fixed cost b. Total variable cost c. Total cost d. Marginal cost
es Output 6 1 2 3 4 5 S 6 17 8 9 Total Cost $ 2,500 3,416 4,040 4.480 4,900 5,220 5,540 6,310 7,328 9,718 2500 Total Variable Cost b. What is the value of total fixed cost? 6 units $ 0 units 910 1540 1980 2400 2720 3040 3810 4820 7210 Marginal Cost c. What is the most productive level of output? $ 910 630 440 420 320 320 770 1010 2390 Average Total Cost $ d. At what output is economic capacity? Output: e. If TFC doubled, what is the marginal cost of the 7th unit? 3410 2020 1493.33 1225 1044 923.33 901.42 915 1078.89 Average Variable Cost $ 910 770 660 600 544 506.67 544 29 6025 801.11 Average Fixed Cost 2500 1250 833.33 625 500 416.67 35713 312.5 27778
QUESTION 2 A firm is considering changing its plant size. It calculates the amount of output it would be able to produce and the total cost for various plant sizes, as shown in the accompanying table. If the firm is currently using plant size C, the firm is experiencing which of the following? Plant Size Quantity Total Cost ($) A 1 10 10 80 C 100 900 200 2,000 500 5,500 F 1,000 15,000 economies of scale O diseconomies of scale constant returns to scale O diminishing marginal product O increasing marginal product
a. Calculate marginal cost using the formula given in the chapter: ATotal cost/AQuantity. Quantity Variable cost ($) Total cost ($) Marginal cost ($) 0 0 100 1 60 160 2 110 210 100 3 180 280 100 4 270 370 100 5 400 500 100 b. Calculate AVariable cost/AQuantity. Quantity Variable cost ($) AVariable cost Total cost ($) ($)/ AQuantity 0 0 100 1 60 160 100 2 110 210 100 3 180 280 100 4 270 370 100 5 400 500 100
Using the following table construct the cost schedule for a firm operating in the short run Graph the average variable cost, average total cost and marginal cost curves. Quantity- Production (thousands) Total Fixed cost Total Variable cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 0 $400 0 $400 --- --- ---- ---- 1 $640 2 $720 3 $780 4 $820 5 $850 6 $890 7 $980 8 $1200…
Megan’s Snow Shoveling Service, in which Megan is the only employee, has the following cost schedule. Quantity(sidewalks shoveled per day) Variable Cost Total Cost AVC ATC MC 0 $0 $30 - - - 1 10 40 2 25 55 3 45 75 4 70 100 5 100 130 6 135 165 Calculate average variable cost, average total cost, and marginal cost for each quantity and graph all three curves.
6. No. of COWS (Head) 0 25 50 75 100 125 150 175 200 225 250 275 If the price of beef was $98.00 what is the optimum number of cows and the profit or loss at that number and price? Output (cwt. of beef) 0 104 220 322 413 494 568 629 676 710 730 737 Total Total Average Average Average Marginal Marginal Total Total Profit Cost Variable Fixed Revenue Revenue Fixed Total Cost Cost Costs Costs Cost 20,000 20,000 XXX XXX XXX 20,000 24,500 43.27 192.31 235.58 90.91 131.82 20,000 29,000 40.91 20,000 33,500 41.93 62.11 104.04 20,000 38,000 43.58 48.43 92.01 45.55 40.49 86.03 20,000 42,500 47,000 27,000 20,000 47.54 35.21 82.75 20,000 51,500 50.08 31.80 81.88 31,500 36,000 20,000 56,000 53.25 29.59 82.84 57.04 28.17 85.21 40,500 20,000 60,500 45,000 20,000 65,000 61.64 27.40 89.04 49,500 20,000 69,500 67.16 27.14 94.30 Total Variable Cost 0 4,500 9,000 13,500 18,000 22,500 Ans. Ans. XXX 43.27 38.79 44.12 49.45 55.56 60.81 73.77 95.74 132.35 225.00 642.86 98.00 98.00 98.00 98.00 98.00 98.00 98.00…
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVC curves to illustrate