Attempts 2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 200 180 160 140 120 100 40 20 Keep the Highest 0/5 0 4 8 Demand 12 16 20 24 28 QUANTITY (Units) 32 36 40 Graph Input Tool Market for Goods Quantity Demanded (Units) Demand Price (Dollars per unit) 20 100.00 (?)

Attempts 2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 200 180 160 140 120 100 40 20 Keep the Highest 0/5 0 4 8 Demand 12 16 20 24 28 QUANTITY (Units) 32 36 40 Graph Input Tool Market for Goods Quantity Demanded (Units) Demand Price (Dollars per unit) 20 100.00 (?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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DO >> # O ? O CENGAGE MINDTAP HW (Ch 13) Suppose the imaginary company of Roobek is a small, Cedar Rapids-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity (Pairs) 0 240 L234 1 5 .6 Total Cost Marginal Cost (Dollars) (Dollars) T 120 210 270 315 380 475 630 MindTap - Cengage Learning AAAAA Fixed Cost Variable Cost (Dollars) (Dollars) I Average Variable Cost (Dollars per pair) On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points ftriangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $210, so you should start your ATC curve by…
5. Profit maximization and shutting down in the short run The following graph plots daily cost curves for a firm operating in the competitive market for air fryers. PRICE (Dollars per thyer 8 & 0 Price (Dollars per fryer) 25.00 70.00 MC 100.00 ATC AVC Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) QUANTITY (Thousands offers) Quantity Total Revenue Fixed Cost (Fryers) (Dollars) 30,000 (Dollars) 1,600,000 1,600,000 1,600,000 Variable Cost (Dollars) Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's…
2. Refer to the following graph to answer Question #1 40 35 30 25 20 16 15 12 10 5 I 10 20 MC ATC P₁ AVC P₂ P3 30 45 50 60 70 80 90 100 110 a) What is profit if the price is P1? b) What is profit if the price is P2? c) What is the profit maximizing level of output if the price falls to P3?
4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for motor scooters. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per scooter) 100 90 80 70 60 50 40 40 30 ATC 20 MC AVC 10 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of scooters per day) Profit or Loss ? In the short run, given a market price equal to $45 per scooter, the firm should produce a daily quantity of 45,000 scooters. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of $ thousand per day for the firm.
Doan's Headphones company is innovative enough to have a monopoly in their market where they sell 80 million headphones each year. The marginal cost of making headphones is very low and Doan's analytic's department realize that if it dropped prices by 30% sales would rise enough that the company's profits would also increase. This result suggests that at Doan's current output: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a MC=MR b MC is lower than MR MC is higher than MR
Number of Consumers Who Try the Product Number of Repeat Customers 10 million 10 million Product Energy bar A Energy bar B In the table above, the profit from repeat customers will equal the cost of the advertisement if there are Profit per Repeat Customer 5 million 1 million $6 6 Profit from Repeat Customers $30 million 6 million Cost of Advertisement $10 million 10 million million repeat customers. (Enter your response rounded to two decimal places.)
Number of Baskets of Fish (per hour) 0 1 2 3 4 5 Price $13 13 13 13 13 Total Revenue $0 13 26 39 52 65 Total Cost $10 15 22 31 44 61 Total Profit $-10 -2 4 8 8 4 Marginal Cost basket(s) of fish basket(s) of fish basket(s) of fish $5 7 9 13 17 Given the information in the table above about fish production, answer three questions. Instructions: Enter your responses as whole numbers. Indicate negative responses with a (-) negative sign. What rate of output a. Maximizes total revenue? b. Maximizes profit per unit? c. Maximizes total profit? (Note: Choose the higher level of output.)
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a. the increase in profit when output is reduced from 8 to 7 units of output. b. the profit that could be made if output increases from 7 to 8 units of output. c. the deadweight loss associated with the power of the price taking firm. d. the amount of profit when 8 units of output are produced.
Hayfever Farms is an 80-acre hay farm in Colorado. The owners are considering changing the farm's name to Blissful Acres and growing strawberries instead of hay. Use the table of marginal cost (MC) and marginal revenue (MR) to answer two questions. Number of acres MC $ MR $ (hay) MR $ (strawberries) 10 320 730 5600 20 200 730 5600 30 540 730 5600 40 730 730 5600 50 1200 730 5600 60 3200 730 5600 70 5600 730 5600 80 6700 730 5600 If they continue to only grow hay, how many acres should Hayfever Farms devote to growing hay in order to maximize profits? acres of hay: acres If the owners decide to only grow strawberries, how many acres should Blissful Acres devote to growing strawberries in order to maximize profits? acres of strawberries:
3. GB Motor Company produced 600,000 bikes at a price of $440 each. The company made a profit of $60 million that year. The CEO of the company told a journalist that he intended to reduce the price of their bikes to $360, and he expected to sell 900,000 bikes at that price. a) Did GB Motor Company expect the total revenue they receive from selling the bikes to rise or fall following the price cut?
4. Elasticity and total revenue The following graph shows the daily demand curve for bippitybops in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 120 110 100 Total Revenue 90 B0 70 50 40 30 20 10 Demand 10 20 30 40 50 70 90 100 110 120 QUANTITY (Bippitybops) PRICE (Dollars per bippitybop)