Assume a certain firm in a competitive market is producing Q = 1,500 units of output. At Q = 1,500, the firm's marginal cost equals $12 and its average total cost equals $10. The firm sells its output for $9 per unit. At Q = 1,500, the firm's profits equal: a) -$4,500 b) $1,500 c) $6,000 d) -$1,500
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- The firm's profit equal? General accountingA firm has a cost function C(x)=10x+107, where x represents the number of units produced. the firm's revenue function is R(x)=38x if x is equal to 78 find the firm's profit. round to the nearest whole numberA firm produces according to the following production function: F(L,K)=L0.7K0.3. The price of capital is $3 and the wage rate is $7. What is the optimal combination of labor and capital in order to produce 100 units of output? Multiple Choice L*=50,K*=50 L*=100,K*=50 L*=100,K*=100 L*=10,K*=10
- Suppose a firm with a production function given by Q = 30K0.5L0.5 produces 4,000 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $30 per unit. MPL = 15K0.5/L0.5 and MPK = 15L0.5/K0.5. How many units of labor and capital should the firm employ to minimize the cost of producing 4,000 units of output, and what would be the total cost?. If a firm's margin of safety is 35% on sales of P200,000, then its margin of safety on sales of P300,000 will be (assume fixed costs, the variable cost per unit, and the sales price per unit do not change): a.P105,000 b.P170,000 c.P100,000 d.P 35,000Q2. Suppose that Nafitol Company has a fixed cost of ETB 35,000 and VC of ETB 1.75 per unit for its products. Let us further consider that selling price is birr 2.7 per unit. Required: A. Write the revenue and the cost equation of the company B. At what level of production output is the company Break-even? C. What is the amount of the revenue when the company produces 300,000 units? D. If the company plans to earn a profit of 7000, what amount of quantity has to be produced?
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- There are three equally likely states of nature (High, Medium, and Low demand). If the large factory will post profits of $50,000, $25,000, and - $10,000 under these states of nature, respectively, what is the EMV of the factory? a. $28,333.33 b. $50,000 c. $21,666.67 d. $25,000You are managing a firm with market power, and you think the price elasticity of demand for your product is between 1.3 and 1.5. You estimate that your marginal cost is between $55 and $70. The price that you should set would range between $ ☐ and $ ☐. (Round your answers to two decimal places.) If you refine your estimate of the marginal cost to $80, the price you should set would now range between $ and $ (Round your answers to two decimal places.)A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders. Instructions: Enter your answers as whole numbers. a. What is its percentage rate of return? percent. b. Is the firm earning an economic profit? (Cick to select) If so, how large? O percent. c. Will this industry see entry or exit? (Click to select) d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium? O percent.